Opinion
No. 01-02-01157-CV
Opinion issued September 9, 2004.
On Appeal from the 165th District Court, Harris County, Texas, Trial Court Cause No. 2001-20443.
Paul E. Nunu, Houston, TX, for appellant.
Daniel L. Bates, Decker, Jones, McMackin, McClane, Hall Bates, Fort Worth, TX, for appellee.
Panel consists of Justices TAFT, HANKS, and HIGLEY.
MEMORANDUM OPINION
Appellant, Debra Navarro-Martha ("Debra"), appeals a take-nothing judgment rendered upon cross-motions for summary judgment. We determine whether certain endorsements within the business automobile policy of Debra's husband's employer made Debra, when not riding in a covered automobile and when on an excursion unrelated to her husband's work, an insured for purposes of that policy's uninsured and underinsured motorist ("UM/UIM") endorsement. We affirm.
Background
On the date of the accident on which this suit is based, Debra was married to Vince Martha ("Vince"). Vince was an operations manager for NES Companies d/b/a Genpower Pump and Equipment. The company by whom Vince was employed was one in which National Equipment Services, Inc. ("NES") had an ownership interest. NES had a Texas standard business automobile policy ("the policy") with American Home Assurance Company ("American"). The policy listed as named insureds NES and certain of its affiliated business entities, including Vince's employer, but no individuals. The policy's declarations page listed "any auto" in the column for "covered auto[s]" for liability coverage, and it listed the UM/UIM endorsement number in the column for "covered auto[s]" for UM/UIM coverage. The policy also contained an endorsement for UM/UIM coverage and separate "Employees As Insureds" ("EAI") and "Drive Other Car — Broadened Coverage for Named Individuals" ("DOC") endorsements for liability coverage. Vince possessed a company vehicle that was a covered automobile under the policy.
On January 5, 2001, Debra was riding as a passenger in a car owned and driven by Jeff Fulkerson. The car was involved in a one-car accident in which Debra was injured. Fulkerson's car was not a covered automobile for any coverage afforded by the policy. Fulkerson's car was instead covered by a different carrier and had a $25,000 policy limit for liability coverage. Neither Fulkerson nor Debra was an employee of or was furthering the business of any named insured under the policy on the night of the accident. Vince was not involved in the accident and was not driving, occupying, or otherwise using Fulkerson's car at the time.
According to Debra's petition, the accident caused her to incur far more than $25,000 in medical expenses. Fulkerson testified by affidavit that he accepted full responsibility for the accident and Debra's resulting injuries. Debra made a claim for UM/UIM coverage under the policy, but American denied coverage. Debra sued Fulkerson for negligence and sued American for UM/UIM coverage under the policy and for various violations of the Insurance Code. Debra settled with Fulkerson in exchange for the full policy liability limits of $25,000.
Debra had a personal automobile policy issued by a different insurer, but she had rejected UM/UIM coverage under that policy.
American moved for summary judgment on the ground that Debra's claims failed because she was not an insured entitled to UM/UIM coverage under the policy. Debra moved for partial summary judgment on the ground that she was entitled to UM/UIM coverage. Without specifying grounds, the trial court granted American's motion, denied Debra's motion, rendered a take-nothing judgment on Debra's claims against American, and dismissed with prejudice Debra's claim against Fulkerson.
Standard of Review
Traditional summary judgment under rule 166a(c) is proper only when a movant establishes that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). A defendant is entitled to a traditional summary judgment if the evidence disproves as a matter of law at least one element of each of the plaintiff's causes of action or if the evidence conclusively establishes all elements of an affirmative defense. Id. When a plaintiff moves for traditional summary judgment on its own claims for affirmative relief, the plaintiff has the burden of proving conclusively each element of its causes of action. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986). The plaintiff carries this burden if it produces evidence that would suffice to support an instructed verdict at trial on its claims for affirmative relief. Ortega-Carter v. Am. Int'l Adjustment Co., 834 S.W.2d 439, 441 (Tex. App.-Dallas 1992, writ denied). We indulge every reasonable inference in favor of the non-movant, resolve any doubts in its favor, and take as true all evidence favorable to it. Randall's Food Mkts., 891 S.W.2d at 644; Flameout Design Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex. App.-Houston [1st Dist.] 1999, no pet.).
When both sides move for summary judgment and the trial court grants one motion and denies the other, we can consider both motions, their evidence, and their issues and may render the judgment that the trial court should have rendered. Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001); CU Lloyd's of Tex. v. Feldman, 977 S.W.2d 568, 569 (Tex. 1998). When an order granting summary judgment does not specify the grounds upon which the trial court ruled, we must affirm to the extent that any of the summary judgment grounds is meritorious. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995).
Rules of Construction and Burdens of Proof Applicable to Insurance Contracts and Disputes
We construe an insurance contract we do as any other contract. Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 740-41 (Tex. 1998). Our primary goal is to effectuate the written expression of the parties' intent. Id. at 741. We read the contract as a whole, striving to give every part meaning and effect. Id. The Supreme Court has recently explained that, "[i]n cases . . . where the policy forms are mandated by a state regulatory agency, the actual intent of the parties is not material. . . . [W]hen construing such policies, we look to determine the ordinary, everyday meaning of the words to the general public. . . . `A true search for what the courts usually speak of as the intent of the parties will not be an inquiry as to what the words . . . meant to this particular insurer or insured. It is, first, an effort to determine the ordinary lay meaning of the words to the general public, and, in light of this meaning, it is, second, an examination of the choice the purchaser had and the choice he made.'" Progressive County Mut. Ins. Co. v. Sink, 107 S.W.3d 547, 551-52 (Tex. 2003) (quoting United States Ins. Co. of Waco v. Boyer, 269 S.W.2d 340, 341 (Tex. 1954)).
A contract is unambiguous when, after applying construction rules, we conclude that it can be given a definite legal meaning. Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). When the contract is unambiguous, we give effect to its plain language. Perrotta v. Farmers Ins. Exch., 47 S.W.3d 569, 574 (Tex. App.-Houston [1st Dist.] 2001, no pet.). Ambiguity is a question of law. CBI Indus., Inc., 907 S.W.2d at 520. A contract is ambiguous when, after applying construction rules, we conclude that it could have two or more reasonable interpretations. Balandran, 972 S.W.2d at 741. We may consider parol evidence of the parties' interpretation only if the contract is ambiguous. CBI Indus., Inc., 907 S.W.2d at 520. If the contract is ambiguous, we must adopt the construction most favorable to the insured. Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex. 1991).
In an insurance dispute, the claimant has the initial burden to establish that his claim comes within the scope of coverage provided by the policy. Comsys Info. Tech. Servs., Inc. v. Twin City Fire Ins. Co., 130 S.W.3d 181, 188 (Tex. App.-Houston [14th Dist.] 2003, pet. granted); Evergreen Nat'l Indem. Co. v. Tan It All, Inc., 111 S.W.3d 669, 675 (Tex. App.-Austin 2003, no pet.). In contrast, the insurer has the burden to prove that a claim comes within a policy exclusion or limitation of coverage. Tex. Ins. Code Ann. art. 21.58(b) (Vernon Supp. 2004-2005); Tan It All, 111 S.W.3d at 675. Whether Debra was an insured under the UM/UIM endorsement is a question of the existence of coverage, rather than of an exclusion, limitation, or exception to coverage; accordingly, Debra had the burden of proof. See Comsys Info. Tech. Servs., 130 S.W.3d at 188; Tan It All, 111 S.W.3d at 675.
In her reply brief, Debra states that American "relies on a policy exclusion because it states that, in the blank for designated person [in the UM/UIM endorsement], there is [no person] listed." This argument of American's, discussed further below, is not based on a policy exclusion or limitation, but is instead an argument that Debra does not fall within the definition of an insured for that endorsement because, among other reasons, her husband was not listed as a designated person in the blank provided in the endorsement.
Coverage
A. The UM/UIM Endorsement
The policy contains the standard Texas UM/UIM endorsement, which provided in pertinent part as follows:
A. COVERAGE
We will pay damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by an insured. . . .
. . .
C. WHO IS AN INSURED
1. You and any designated person and any family member of either.
2. Any other person occupying a covered auto.
3. Any person or organization for damages that person or organization is entitled to recover because of bodily injury sustained by a person described in 1. or 2. above.
. . .
F. ADDITIONAL DEFINITIONS
The following are added to the DEFINITIONS Section and have special meaning for UNINSURED/UNDERINSURED MOTORISTS INSURANCE:
1. "Family member" means a person related to you by blood, marriage or adoption who is a resident of your household, including a ward or a foster child.
2. "Designated person" means an individual named in the schedule. By such designation, that person has the same coverage as you. . . .
4. "Covered Auto" means an auto:
a. owned or leased by you or
b. while temporarily used as a substitute for an owned covered auto that has been withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction.
Liability coverage of this policy must apply to the covered auto. Covered auto includes autos . . . for which Personal Injury Protection coverage has not been rejected in writing.
(Emphasis in original.) Under a heading labeled "Schedule" within the UM/UIM endorsement appeared a blank for "Designated Person." The parties left that space blank.
The policy defined "you" and "your" throughout the policy as "the Named Insured shown in the Declarations," which listed only NES. See Old Am. County Mut. Fire Ins. Co. v. Sanchez, 81 S.W.3d 452, 459 (Tex. App.-Austin 2002, pet. granted) (noting that term "named insured" is term of art referring to insured listed on declarations page of insurance policy). The policy contained an endorsement expanding the definition of named insured to include certain subsidiaries and acquired companies affiliated with NES. That named-insured endorsement did not list Vince, Debra, any other individuals, or any category of individuals as named insureds.
B. Debra's Problem
The problem facing Debra is that the Texas Supreme Court has already held that, under the unambiguous language of this UM/UIM endorsement to a business automobile policy, one in Debra's situation does not enjoy coverage for injuries sustained in an accident involving a non-covered vehicle that is being used for personal purposes. In Grain Dealers Mutual Insurance Co. v. McKee, the supreme court considered a claim for UM/UIM coverage under the exact policy language at issue here. See 943 S.W.2d 455 (Tex. 1997). The named insured under the business automobile policy in Grain Dealers was a corporation, Future Investments, of which Gerald McKee was the president and (the court assumed for purposes of its opinion) the sole shareholder. Id. at 456. McKee's minor daughter, Kelly, was injured in a one-car accident while riding as a passenger in a car that was driven by her step-sister and owned by the step-sister's husband Id. The parties stipulated that neither the driver nor the car was covered under Future Investments's policy and that the accident occurred during a drive that was unrelated to any of Future Investments's business purposes. Id.
McKee sought coverage for Kelly's personal injuries under the UM/UIM endorsement to Future Investment's policy. Id. The supreme court held that there was no UM/UIM coverage for Kelly:
In order for the policy to cover Kelly, she must fall within one of the categories of "who is an insured." The Business Auto Coverage Form of the . . . policy provides: "Throughout this policy the words `you' and `your' refer to the Named Insured in the Declarations page." The declarations page of the . . . policy provides that Future Investments is the "named insured." Future Investments is also the "named insured" in the UM/UIM and PIP endorsements. The UM/UIM endorsement defines "designated person" as "an individual named in the schedule. By such designation, that person has the same coverage as you." Future Investments did not name a "designated person" in the space provided in the UM/UIM endorsement and did not list additional autos to be covered under either endorsement. The names of Gerald McKee and Kelly McKee do not appear anywhere in the policy or the endorsements. As a result, Kelly does not qualify as "you" or "designated person" under the endorsements.
Additionally, Kelly does not qualify as a "family member" under the endorsements. "Family member" is defined in both endorsements as "a person related to you [Future Investments] by blood, marriage, or adoption who is a resident of your [Future Investments's] household, including a ward or foster child." Kelly is obviously not related to Future Investments by blood, marriage, or adoption. Of course, she also does not reside in Future Investments' household. A corporation simply cannot have a "family" as that term is defined in the policy.
Id. at 457; see also Webster v. U.S. Fire Ins. Co., 882 S.W.2d 569, 571-73 (Tex. App.-Houston [1st Dist.] 1994, writ denied) (reaching similar holding on policy language like that considered in Grain Dealers and in instant case, although Websters conceded that they did not fall within UM/UIM "designated persons" category). The court then held that, because Kelly did not fit into the other two definitions of an insured under the UM/UIM endorsement — by having occupied a covered vehicle, for example — she was not entitled to UM/UIM benefits under the business policy. Id. at 457. Siding with the majority of courts in other jurisdictions, the Grain Dealers court rejected arguments that the combination of the "family member" language in the UM/UIM endorsement's definition and a business entity's being designated as the named insured made the policy ambiguous. See id. at 459.
The "Who Is An Insured" language of the UM/UIM endorsement, as well as the defining of "you" as the named insured, are the same in this case as they were in Grain Dealers. See id. at 456-57. In its summary judgment motion, consistent with the Grain Dealers court's holding, American argued that Debra was not entitled to UM/UIM coverage because (1) she was not a named insured and could not be the family member of a named insured, (2) no one was listed as a "designated person" in the UM/UIM endorsement, and (3) Debra was not occupying a covered vehicle when the accident occurred.
The only exception is, as noted, that a named-insured endorsement added certain entities related to NES as named insureds. That endorsement did not name any individuals, however.
The UM/UIM endorsement provided coverage for the named insureds: NES (listed on the declarations page) and certain of its affiliated companies (added through a named-insured endorsement). NES could have added Vince or anyone else to the named-insured endorsement, but did not. No one disputes that Vince was not a named insured. Additionally, no individual could have been a "family member" of a named insured because none of the named insureds was an individual and because business entities cannot have a family. See Grain Dealers, 943 S.W.2d at 457, 459; Webster, 882 S.W.2d at 572-73.
Neither were Vince or Debra "designated person[s]" within the meaning of the UM/UIM endorsement. The UM/UIM endorsement defined a "designated person" as "an individual named in the schedule." (Emphasis added.) The endorsement did not say "any" schedule or "a" schedule. The term "the schedule" thus referred back to an earlier section within the endorsement itself, entitled "SCHEDULE." See Grain Dealers, 943 S.W.2d at 457 (looking first to the space provided within the UM/UIM endorsement itself for designated persons to determine whether any person was designated as an UM/UIM insured). Under the endorsement's section entitled "SCHEDULE," there is a blank for "Designated Person." That blank was not filled in with anything. Therefore, no one was designated as a "designated person" for purposes of the UM/UIM endorsement. See id.
Debra alternatively argues that a separate spreadsheet of NES vehicles and their drivers (including Vince) — dated August 9, 2000 (before the policy's issuance), apparently generated by NES, not on file with American, not attached to the policy, and not referred to in the UM/UIM endorsement — constituted a "schedule" of designated persons for purposes of UM/UIM coverage. Again, the UM/UIM endorsement's "designated person" blank was not filled in with a notation indicating that a list of designated persons was to be found in a separate schedule of any kind. No summary judgment evidence indicates that the UM/UIM endorsement at any pertinent time incorporated or even referred to a separate schedule. It is thus immaterial whether Vince was listed on a separate schedule: the UM/UIM endorsement unambiguously did not define "designated person" in terms of any such schedule.
The parties dispute whether the August 9, 2000 document was truly a "schedule" of designated individuals or was instead just a spreadsheet of vehicles and their information. However, any possible fact issues surrounding the August 9, 2000 spreadsheet are immaterial for purposes of this specific discussion.
Finally, the parties stipulated that Debra's sole basis for claiming UM/UIM coverage was the first definition of an UM/UIM insured and that Debra was not injured in "a covered auto for any coverage afforded by" the policy.
In her appellate brief, Debra argues that the fact that Vince was issued a "covered auto" suffices to make him an UM/UIM insured by virtue of the second definition of an UM/UIM insured. However, that definition provides that only one " occupying a covered auto" is an UM/UIM insured. It is undisputed that neither Vince nor Debra was occupying a covered automobile at the time of the accident.
The trial court would thus not have erred in granting American's motion and in denying Debra's for these reasons. See Grain Dealers, 943 S.W.2d at 457.
C. Debra's Proposed Solution
Apparently to avoid the effect of Grain Dealers, Debra argues that three of the policy's other liability endorsements, when read together with the UM/UIM endorsement, made her (by virtue of her being Vince's wife) an insured for purposes of UM/UIM coverage. She argues that each of these three endorsements, which extended liability coverage to certain individuals, required that UM/UIM coverage also be extended to those individuals and their family members. She distinguishes Grain Dealers because, in it, the court recognized that neither Kelly nor McKee had any liability coverage under the policy, whereas, here, various endorsements allegedly extended liability coverage to Vince or to Vince and Debra. See id. We examine each of these endorsements, and Debra's arguments concerning them, below.
1. The Additional-Insured Endorsement
In issue one, Debra argues that the trial court erred in granting American's summary judgment motion, and in denying her motion for partial summary judgment, because Vince, by virtue of his oral employment agreement with NES, was an insured under an additional-insured endorsement for purposes of liability coverage. Debra argues that Vince's being an additional insured, and his thus being entitled to liability coverage, necessarily also entitled him to UM/UIM coverage. Debra then argues that, because the UM/UIM endorsement defined an insured to include a family member of one entitled to UM/UIM coverage, she, as Vince's wife, was also an insured for UM/UIM coverage.
Although Debra does not expressly state in her four issues that she is also challenging the denial of her own partial summary judgment motion, other portions of her brief imply that she is. Accordingly, we interpret Debra to have challenged both the granting of American's summary judgment motion and the denial of her own motion.
Debra waived this argument by not having raised it in her summary judgment response or in her own motion for partial summary judgment. See McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341, 343 (Tex. 1993) (requiring that movant present summary judgment grounds in motion and that non-movant present issues defeating summary judgment in answer or response, with sole exception's being that non-movant may always argue on appeal that movant's grounds were legally insufficient to support summary judgment); cf. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 467 (Tex. 1998) (holding that insurer waived reliance on policy exclusion for not having moved for summary judgment on ground that that exclusion precluded recovery). That Debra would not mention the additional-insured endorsement in her summary judgment pleadings is not surprising, given that her "live" petition, which set out the two other endorsements that she claimed entitled her UM/UIM coverage, did not even mention the additional-insured endorsement.
`Debra's petition occasionally used the term "additional insured," but it was clear from the context, and from the endorsements that were cited in the petition (which did not include the additional-insured endorsement), that Debra was not referring to the additional-insured endorsement itself. Rather, Debra's petition used the term "additional insured" to mean an "insured" under endorsements other than the additional-insured endorsement.
Debra responds with four arguments to show that she did not waive this issue. First, she argues that she put "the entire policy into issue" simply by arguing, in her summary judgment response and motion for partial summary judgment, that Vince (and thus she, as Vince's spouse) was an insured under the terms of the UM/UIM endorsement. We disagree. An argument that the UM/UIM endorsement's terms entitled Debra to benefits preserved an argument concerning the UM/UIM endorsement's terms themselves. That same argument did not, by itself, preserve arguments that other endorsements, when read together with the UM/UIM endorsement, provided Debra coverage as an UM/UIM insured. Debra's new argument concerning the interplay between the additional-insured endorsement and the UM/UIM endorsement falls into this latter category. The argument thus had to be raised to be preserved. See McConnell, 858 S.W.2d at 341, 343.
Second, Debra argues that the rule of construction requiring courts to interpret policy language in the context of the entire policy also put the entire policy at issue, so that she could rely on any policy provisions on appeal. See Phillips Petroleum Co. v. St. Paul Fire Marine Ins. Co., 113 S.W.3d 37, 40 (Tex. App.-Houston [1st Dist.] 2003, pet. denied) (noting that, in interpreting insurance contract, court "must attempt to give effect to all contract provisions" and must "construe the terms of the contract as a whole and consider all of its terms, not in isolation, but within the context of the contract."). A rule of judicial construction has nothing to do with the parties' burden to present summary judgment arguments and grounds to the trial court, however.
Third, Debra argues that, to the extent that it was the movant, American had to show as a matter of law that none of the policy's endorsements afforded Debra any coverage. However, Debra had pleaded that she had UM/UIM coverage only because the EAI and DOC endorsements made her husband (and thus her) an insured. The policy contained at least 13 endorsements that Debra did not mention in her pleadings. American was entitled to rely on the policy provisions that Debra had expressly pleaded provided her coverage in determining what summary judgment grounds to assert and did not have to attack or to address every remaining, unpleaded endorsement in the policy.
Fourth, Debra argues that American "waived any objection that the [additional-insured-endorsement] grounds were not expressly presented to the trial court because there were no special exceptions filed in response" to Debra's motion for partial summary judgment. Debra's motion for partial summary judgment raised certain grounds, but did not raise the additional-insured-endorsement ground that she asserts on appeal. In this situation, American did not have to specially except to Debra's motion. See McConnell, 858 S.W.2d at 342 ("When the motion for summary judgment clearly presents certain grounds but not others, a non-movant is not required to except.").
Accordingly, we hold that Debra waived issue one. We overrule the issue.
2. The EAI Endorsement
In issue two, Debra argues that the trial court erred in rendering summary judgment for American, and in denying her motion for partial summary judgment, because the policy's EAI endorsement — which made NES's employees insureds for liability coverage when driving covered automobiles not owned, hired, or borrowed by NES in its business — also allegedly made Vince (and thus her) an insured for purposes of UM/UIM coverage.
In its summary judgment motion, American asserted that (1) the EAI endorsement extended only liability coverage, not UM/UIM coverage, to NES's employees; (2) the two endorsements did not refer to each other and could not be read together; (3) the EAI endorsement did not extend even liability coverage to spouses; and (4) Fulkerson's vehicle was not a covered automobile for liability or any other coverage.
Debra first responds that the EAI endorsement, which necessarily included Vince, was tantamount to a designation of Vince as a "designated person" for purposes of the UM/UIM endorsement. Because the UM/UIM endorsement provided for coverage for the family member of a designated person, Debra argues that she was also covered. We disagree. As we have already noted, the "designated person" blank on the UM/UIM schedule was not filled in, either with a person's name, with a statement such as "per schedule on file with company" (language that the policy did use to designate covered individuals elsewhere), or with a reference to any other provisions of or endorsements to the policy. Nowhere did the UM/UIM endorsement state that every person covered for liability purposes under any other endorsement was also an UM/UIM "designated person." Simply put, the two endorsements did not refer to each other, and one endorsement cannot be used to fill in blanks in the other when both provide for totally different coverages. Cf. Progressive County Mut. Ins. Co. v. Carway, 951 S.W.2d 108, 116 (Tex. App.-Houston [14th Dist.] 1997, pet. denied) (declining to hold that parties intended to change definition of insured for liability coverage — which did not include insured's employee as insured, by name or otherwise — by having purchased PIP and UM/UIM endorsements, which contained broader and more favorable definitions of insured).
We also reject a related argument of Debra's. In support of that argument, Debra produced a copy of the "Texas Automobile Rules and Rating Manual Governing the Insuring of Automobiles and Standard Automobile Endorsements for the State of Texas" ("the manual"), which shows that it was "prescribed and approved by the Texas Department of Insurance pursuant to House Bill 2, as passed by the 72nd Legislature of the State of Texas." That manual provides:
26. UNINSURED/UNDERINSURED MOTORISTS COVERAGE
A. Owners . . .
1. Uninsured/underinsured motorists coverage must be provided when liability coverage is written for the owner of an auto or trailer which is registered or specifically garaged in Texas unless rejected in writing by the named insured. . . .
2. Designated person. This insurance may be extended to any person who does not own a motor vehicle, at the designated rate for each person designated, provided such individual is an executive officer, partner or employee of the insured named in the policy. . . .
(Emphasis added.) Debra effectively claims that paragraph A, 2 of the manual transforms the EAI endorsement into a designation of individuals for UM/UIM purposes. We disagree. First, this paragraph of the manual does not refer to any coverage or endorsements besides UM/UIM. Second, the manual indicates that UM/UIM coverage may be extended, but at the designated rate per designated person. The EAI endorsement has its own premium for EAI liability coverage. Under Debra's interpretation, an insured could pay only for EAI liability coverage and simultaneously obtain UM/UIM coverage for all employees, without paying the UM/UIM designated-person rate. Debra's construction contravenes the manual that she produced, which allows for a designated-person rate for each designated person.
Second, we note that the express terms of the EAI endorsement modified the definition of an insured for purposes of liability coverage only. Liability coverage is not UM/UIM coverage. See Trotter v. Fed. Ins. Co., 865 So.2d 411, 415 (Miss. Ct. App. 2004) ("Liability is a different type of coverage than uninsured motorist coverage."). Nonetheless, Debra argues that UM/UIM coverage "follows the liability coverage" and thus "follows the insured" as a matter of law, meaning that anyone insured in any way for liability coverage coextensively enjoys UM/UIM coverage by operation of law. She bases this argument on the language in the UM/UIM statute — Insurance Code article 5.06-1(a) — that UM/UIM coverage be provided for "persons insured thereunder," i.e., under "liability insurance . . . covering liability arising out of ownership, maintenance, or use of any motor vehicle. . . ." See Tex. Ins. Code Ann. art. 5.06-1(1) (Vernon Supp. 2004-2005). Without clearly saying so, Debra is effectively arguing that, by virtue of the statute, Vince would have been entitled to UM/UIM coverage for the accident even though he did not fall within any of the three definitions of an UM/UIM insured. Debra argues that, because Vince would allegedly have had UM/UIM coverage had he been in the accident, she also has UM/UIM coverage.
No automobile liability insurance . . . covering liability arising out of ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state unless coverage is provided therein or supplemental thereto . . . for persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury, sickness, or disease, including death, . . . resulting therefrom. The coverages required under this Article shall not be applicable where any insured named in the policy shall reject the coverage in writing; provided that unless the named insured thereafter requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured has rejected the coverage in connection with a policy previously issued to him by the same insurer or by an affiliated insurer.
Tex. Ins. Code Ann. art. 5.06-1(1) (Vernon Supp. 2004-2005).
We disagree. For purposes of argument only, and without deciding whether Debra's premise is correct, we accept her premise that UM/UIM coverage extends, as a matter of law, to those individuals to whom the EAI endorsement extends liability coverage. Even with our accepting Debra's premise, however, the policy does not extend UM/UIM coverage to Debra. First, the EAI endorsement does not extend liability coverage to spouses of employees, but only to employees. Accordingly, even if the EAI liability endorsement's existence could somehow extend UM/UIM coverage, it could not extend that coverage to employees' spouses — here, Debra. Second, the EAI endorsement provides an employee with liability coverage only "while using a covered auto you [the named insureds] don't own, hire or borrow in your business or your personal affairs." The parties stipulated that Fulkerson's car was not a covered automobile for any coverage afforded by the policy.
"When the Legislature specifies a particular extent of insurance coverage, any attempt to void or [to] narrow such coverage is improper and ineffective." Unigard Sec. Ins. Co. v. Schaeffer, 572 S.W.2d 303, 307 (Tex. 1978); Am. Liberty Ins. Co. v. Ranzau, 481 S.W.2d 793, 796-97 (Tex. 1972) (holding that, if insurance clause adopted by Texas Insurance Board contravenes statute, the clause's approval by the Board is ineffective). Likewise, when insurance policies have failed to provide UM/UIM coverage, courts read the statutory minimum coverage into the policy as a matter of law. See, e.g., Allstate Ins. Co. v. Hunt, 469 S.W.2d 151, 155 (Tex. 1971); Guar. Ins. Co. of Tex. v. Boggs, 527 S.W.2d 265, 269 (Tex.Civ.App.-Amarillo 1975, writ dism'd). However, no Texas court has held that article 5.06-1(1) provides for a broader category of those to whom UM/UIM coverage must be extended than the definitions of an UM/UIM insured contained in the standard Texas endorsement, so that that standard endorsement impermissibly limits article 5.06-1(1)'s terms. Likewise, no Texas court has held that an employee provided liability coverage under an EAI endorsement is entitled to UM/UIM coverage, regardless of whether he falls within the definitions of an UM/UIM insured or whether an UM/UIM premium has been paid for him. Debra does not rely on any Texas cases on point, and we distinguish the authority on which she does rely because, in those cases, (1) the courts did not expressly hold what Debra claims and (2) the insured was evidently the named insured or a family member of the named insured under a personal automobile policy or the courts did not state under what exact policy or terms the insured was covered. See Stracener v. United Servs. Auto. Ass'n, 777 S.W.2d 378, 380 (Tex. 1989); Am. Motorists Ins. Co. v. Briggs, 514 S.W.2d 233, 234 (Tex. 1974); Ranzau, 481 S.W.2d at 794; Phillips v. New Hampshire Ins. Co., 263 F.3d 1215 (10th Cir. 2001). Although we need not decide the issue, we note that there is some disagreement among courts of other jurisdictions concerning whether an EAI endorsement affects UM/UIM coverage under a business automobile policy. Compare, e.g., Wausau Underwriters Ins. Co. v. Baillie, 281 F. Supp.2d 1307, 1316 (M.D. Fla. 2002) (perhaps implied), aff'd, 2003 WL 22239909 (11th Cir. 2003); McMichael v. Aetna Ins. Co., 878 P.2d 61, 62-63 (Colo. Ct. App. 1994), aff'd on same grounds, 906 P.2d 92, 96-98 (Colo. 1995); and Zurich Am. Ins. Group v. Wynkoop, 746 N.E.2d 985, 989 (Ind. Ct. App. 2001); with Saffel v. Bamburg, 478 So.2d 663, 665 (La. Ct. App. 1986) (although not considering issue, noting EAI endorsement and still finding no UM/UIM coverage for other reasons), writ denied, 481 So.2d 1335 (La. 1985); Trotter v. Fed'l Ins. Co., 865 So.2d 411, 414-15 (Miss. Ct. App. 2004); and Graham v. Travelers Ins. Co., 61 P.3d 225, 228-30 (Okla. 2002) (analogous situation). See Alan I. Widiss, 1 uninsured and underinsured motorist Insurance § 4.23 (rev.2d ed. 1999) (entitled, "Determining who is a `clause a' insured by predicating coverage on who is insured under the liability insurance coverage: Expanding the scope of protection").
Accordingly, we hold that the trial court did not err in rendering summary judgment for American, and in denying summary judgment for Debra, because the unambiguous language of the UM/UIM and the EAI endorsements did not provide Debra with UM/UIM coverage under these circumstances. We thus overrule issue two.
3. The DOC Endorsement
In issue three, Debra argues that the trial court erred in rendering summary judgment for American, and in denying her motion for partial summary judgment, because the policy's DOC endorsement — which extended liability coverage to certain vehicles not owned, hired, or borrowed by NES when driven by individuals named in the endorsement's schedule (or their spouse) — also allegedly made Vince an insured for purposes of UM/UIM coverage.
The DOC endorsement provided in pertinent part as follows:
B. CHANGES IN LIABILITY COVERAGE
1. Any auto you don't own, hire or borrow is a covered auto for LIABILITY COVERAGE while being used by any individual named in the Schedule or by his or her spouse while a resident of the same household except: [naming certain exceptions]. . . .
2. The following is added to WHO IS AN INSURED:
Any individual named in the Schedule and his or her spouse, while resident of the same household, are insureds while using any covered auto described in paragraph B. 1. of this endorsement.
. . .
E. ADDITIONAL DEFINITION
The following is added to the DEFINITIONS Section:
"Family member" means a person related to the individual named in the Schedule by blood, marriage or adoption who is a resident of the individual's household, including a ward or foster child.
(Emphasis in original.) Under a heading labeled "SCHEDULE" within the DOC endorsement, the words "per schedule on file with co." appear in the space for "name of individual" insured under the endorsement.
The parties dispute whether the term "co." within the DOC endorsement unambiguously referred only to American or whether it was ambiguous because it could have referred to the named insureds, as well. For purposes of our discussion, we assume without deciding that this term could include Vince's employer.
American moved for summary judgment on the grounds that (1) no schedule of named individuals for the DOC endorsement was ever created or on file with American, and Vince was thus not entitled to this endorsement's coverage, and (2) the DOC endorsement extended only liability coverage, not UM/UIM coverage, to named individuals, and UM/UIM coverage was thus unaffected by the DOC endorsement. Debra responds by arguing that a spreadsheet (which she calls a "schedule") of vehicles that also listed Vince and other drivers was the "schedule on file with co." to which the DOC endorsement referred.
Again, for purposes of argument only, and without deciding whether Debra's implicit premise is correct, we accept her premise that UM/UIM coverage extends, as a matter of law, to those individuals to whom the DOC endorsement extends liability coverage. Even with our accepting Debra's premise, however, the policy does not extend UM/UIM coverage to her.
No Texas court has held that a DOC endorsement under a business automobile policy extends UM/UIM coverage as a matter of law when the DOC liability insured does not otherwise fit within any definition of an UM/UIM insured and when no additional UM/UIM premium has been paid for him. Debra directs us to no such Texas cases. Although we do not decide the matter, we note that there is some disagreement among courts of other jurisdictions on this issue. Compare, e.g., Baillie, 281 F. Supp.2d at 1315-16; Dickson v. Selective Ins. Group, Inc., 833 A.2d 66, 71-72 (N.J. Super. Ct. App. Div. 2003) (implied), cert. denied, 841 A.2d 91 (N.J. 2004); and Progressive Cas. Ins. Co. v. Hurley, 742 A.2d 1013, 1015 (N.J. Super. Ct. App. Div. 2000) (implied), rev'd on other grounds, 765 A.2d 195 (N.J. 2001); with Liberty Mut. Ins. Co. v. Weiss, 790 So.2d 475, 477 (Fla. Dist. Ct. App. 2001), review granted, 821 So.2d 304 (Fl. 2002); Mikulay v. Home Indem. Co., 449 N.W.2d 464, 467 (Minn. Ct. App. 1989); and Lundgren v. Vigilant Ins. Co., 391 N.W.2d 542, 545 (Minn. Ct. App. 1986).
Debra's argument stands or falls on two pieces of evidence: (1) Vince's affidavit and (2) the "schedule" that she claims extended DOC coverage to Vince, and thus to her, as Vince's spouse. Vince's affidavit reads in pertinent part:
Unlike the EAI endorsement, the DOC endorsement expressly extends liability coverage to the spouse of an individual named in the endorsement under certain circumstances.
I have been designated as the driver of a company vehicle on numerous documents prepared by NES. As the operations manager I have been involved in the preparation of schedules of assigned vehicles for insurance purposes. I am a designated person on the August 9, 2000 schedule attached to this motion. . . .
The August 9, 2000 "schedule" is actually a spreadsheet of the vehicles owned by some NES-affiliated businesses in Houston, along with a notation of the vehicles' identification number, license plate, mileage, purchase date, driver and his or her position in the company, and condition. There is also a column, styled "renewal," for each vehicle. That column, completed for only some vehicles, contains a date, without further explanation.
Debra's evidence neither proved conclusively, nor raised a fact issue concerning, whether anyone was listed for liability coverage under the DOC endorsement. The "Schedule" to which the DOC endorsement referred was necessarily one of persons, not of vehicles. The August 9 spreadsheet that Debra produced is primarily a list of vehicles, not of persons. This is evident because the vast majority of the information on the spreadsheet concerns the listed vehicles ( e.g., VIN, license plate, purchase date, mileage, and condition), not the individuals to whom they were assigned, and drivers were not even listed for all of the vehicles. Moreover, Vince's affidavit itself attests to "schedules of assigned vehicles," rather than to schedules of individuals for liability coverage. Indeed, his affidavit does not state for what "insurance purposes" the spreadsheets were developed or by whom they were prepared. Even when viewed in the most favorable light to Debra, the spreadsheet and Vince's affidavit are simply no evidence of a schedule of DOC-covered individuals.
In contrast, American's evidence — affidavits from the policy's underwriter, the senior vice-president of NES's insurance broker, and NES's chief financial officer — stated that no schedule of individuals was ever created or attached to the policy for DOC coverage; the affiants had never seen the August 9, 2000 spreadsheet while writing the policy; the spreadsheet was not attached to the policy; no schedule was attached to the policy after the policy's issuance; and although the insurance broker generated some spreadsheets (but not the August 9 one) listing NES's vehicles for purposes of renewing coverage generally, those spreadsheets were not DOC schedules and did not list individuals. For the reasons stated above, Vince's affidavit and the April 9 spreadsheet did not raise a fact issue concerning whether a schedule of DOC insureds existed.
Accordingly, we hold that the trial court did not err in rendering summary judgment for American, and in denying summary judgment for Debra, because nothing within the DOC endorsement provided Debra with UM/UIM coverage under these circumstances. Cf. Wausau Underwriters Ins. Co. v. Baillie, 281 F. Supp.2d 1307, 1315-16 (M.D. Fla. 2002) (holding that individual not otherwise entitled to UM/UIM coverage on business automobile policy was not entitled, by virtue of DOC endorsement, to UM/UIM coverage, when evidence showed conclusively that no schedule of individuals for DOC coverage existed), aff'd, 2003 WL 22239909 (11th Cir. 2003). We thus overrule issue three.
D. Fact Issues Concerning Whether Debra Resided With Vince
In issue four, Debra argues that the trial court erred in granting summary judgment for American because a fact issue existed on whether she resided with Vince on the date of the accident. Given our holdings above, we need not reach this issue.
Conclusion
We affirm the judgment of the trial court.