TEXAS COURT RE-EXAMINES ITS PREVIOUS DECISION ON WHAT CONSTITUTES AN “OCCURRENCE” UNDER CGL POLICIES

Recently, an Amarillo court of appeals revisited the meaning of an “occurrence” under a liability insurance policy and concluded that when the insured acts intentionally, there is no “occurrence”, but when the insured concurrently acts with negligence, the distinct act of negligence constitutes an “occurrence.”  In LaTray v. Colony Ins. Co., 07-19-00350-CV, 2021 WL 5127520 (Tex. App.—Amarillo Nov. 4, 2021, no pet. h.) (mem. op.), the court, on a motion for rehearing,  withdrew and superseded its opinion in LaTray v. Colony Ins. Co., 07-19-00350-CV, 2021 WL 97204 (Tex. App.—Amarillo Jan. 11, 2021, no pet. h.) (mem op.).  However, the court kept intact its initial opinion, except to conclude that the insured’s negligent behavior of damaging a fence, while engaged in the intentional conduct of placing construction debris on one’s property, constituted an “occurrence.”    

In LaTray, the insured, after obtaining permission from a tenant rather than the true property owner, intentionally placed 40 tons of construction debris onto a piece of property. In doing so, the insured knocked down fencing as he drove onto and off the property, causing over $8,000 in damage. When the property owner discovered the construction debris and damaged fence, a lawsuit against the insured ensued.

On appeal, the court of appeals noted that an allegation of negligence cannot create an accident out of an intentional act, because coverage depends on facts, not legal theories of recovery.  Further, because the insured clearly intended to move the debris and leave it where he left it, and the claimed injury was the natural and probable consequence of that action, the insured’s bare mistake as to whether he had permission from the true owner of the property did not convert his intentional placement of the debris into an “occurrence.” Thus, because there was no “occurrence”, the court concluded that there was no coverage concerning the dumping of debris.

On the motion for rehearing, Latray contended that the result of the damaged fencing was not a reasonably foreseeable effect of placing the debris and, thus, the act of damaging the fencing constituted an “occurrence” under the policy.  The court agreed.  Although the insured intended to use the dump truck and truck and trailer to move the debris onto the property, he did not intend to damage the fencing on the property as he did so.    

Nonetheless, the insurance policy included and auto exclusion, which the court found precluded coverage under the policy for knocking down the fence.