Louis S. Zimmerman and Janet Zimmerman v. Chicago Title Insurance Company

Court of Appeals of Texas

Louis S. Zimmerman and Janet Zimmerman v. Chicago Title Insurance Company

Court of Appeals of Texas·Decided June 17, 1999·No. 03-98-00025-CV·Published

Opinion

Date: December 23, 1999

Case Number : 03-98-00025-CV

Trial Court No.: 97-06980

Style: Louis S. Zimmerman and Janet Zimmerman v. Chicago Title Insurance Company

You are hereby notified that appellee's motion to publish opinion in the above cause was submitted and granted by this Court on the date noted above. The enclosed substituted page six (6) reflecting that the opinion is released for publication was sent this date to the following persons:

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-98-00025-CV

Louis S. Zimmerman and Janet Zimmerman, Appellants

v.

Chicago Title Insurance Company, Appellee

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL DISTRICT

NO. 97-06980, HONORABLE SUZANNE COVINGTON, JUDGE PRESIDING

The issue presented is whether appellee Chicago Title Insurance Company ("Chicago Title") owed a duty to defend its insureds, appellants Louis Zimmerman and Janet Zimmerman, in a separate case litigated in Travis County. On cross-motions for summary judgment,⁽¹⁾ the district court rendered judgment that Chicago Title had no duty to defend. We will affirm the district court's judgment.

In 1988, the Zimmermans purchased residential property in Austin and obtained a policy of insurance from Chicago Title insuring title to that property.⁽²⁾ The policy obligates Chicago Title to defend the Zimmermans against any action in which a claim adverse to their title is asserted, unless the claim is based on matters excepted by the policy. In the separate litigation underlying this dispute, the Zimmermans were sued by the owners of adjoining property, Mary Joseph and her four daughters, who asserted title by adverse possession to a twelve- to twenty-inch strip of land insured under the Zimmermans' policy. Chicago Title refused the Zimmermans' request to defend them against the suit.

The Zimmermans sued Chicago Title for a declaration that it owed a duty under the policy to defend them in the underlying suit. The Zimmermans subsequently moved for partial summary judgment, asserting that Chicago Title had relied on four policy exclusions to refuse their defense, none of which applied. Chicago Title filed its own motion for summary judgment, arguing that each of the claimed exclusions justified its refusal to defend. Following a hearing, the district court rendered an order denying the Zimmermans' motion and granting summary judgment for Chicago Title.

By two issues on appeal, the Zimmermans challenge the district court's grant of Chicago Title's motion and the denial of their own motion. Whether Chicago Title owes a duty to defend the Zimmermans under their title insurance policy is a question of law. State Farm Gen. Ins. Co. v. White, 955 S.W.2d 474, 475 (Tex. App.--Austin 1997, no pet.). We therefore review the cross-motions for summary judgment to determine whether either Chicago Title or the Zimmermans established the right to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Jones v. Strauss, 745 S.W.2d 898, 900 (Tex. 1988).

To determine whether an insurer must defend its insured against a lawsuit, we read the factual allegations in the pleadings in light of the language of the policy. Trinity Univ. Ins. Co. v. Cowan, 945 S.W.2d 819, 821 (Tex. 1997). The focus is on the facts, not the legal theories, alleged. If a petition does not allege facts within the scope of coverage, an insurer is not legally required to defend a suit against its insured. National Union Fire Ins. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997). By what is sometimes referred to as the "eight corners" rule, we do not look beyond the language of the policy and the allegations in the pleadings. Id. In a case of doubt as to whether the allegations state a cause of action within the coverage of a policy, we must construe the allegations in the insured's favor. Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22, 26 (Tex. 1965).

The Zimmermans' policy excepts from coverage the "rights of parties in possession." Chicago Title asserted in its summary-judgment motion that this exception negated its duty to defend the Zimmermans in the underlying lawsuit. The exception for claims by parties in possession is a standard exception from coverage specifically relating to claims such as adverse possession. See 11 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 159.70, at 159-86 (1998 ed.). The rationale for the exception, at least in part, is that possession of land should put the insured on notice of an adverse interest. See id.

The character of possession sufficient to give an insured notice is that which is open, visible, unequivocal, exclusive, and actual rather than constructive. Shaver v. National Title & Abstract Co., 361 S.W.2d 867, 869-70 (Tex. 1962). Thus, power lines that extended onto the insureds' property from poles that were just off the property, but clearly visible, constituted possession sufficient to put the insureds on notice of a claim to possession. Halvorson v. National Title & Abstract Co., 391 S.W.2d 112, 113-14 (Tex. Civ. App.--Tyler 1965, no writ); see also Jupe v. City of Schertz, 604 S.W.2d 405, 408 (Tex. Civ. App.--San Antonio 1980, writ ref'd n.r.e.) (public's use of gravel road on insureds' property was sufficient possession). In contrast, a gas pipeline buried four feet beneath the insureds' land, with no sign of its presence on the surface, was not possession sufficient to give the insureds' notice of a claim to their property. Shaver, 361 S.W.2d at 869-70.

In the adverse-possession suit, members of the Joseph family alleged that they owned the property bordering the Zimmermans' to the north. Shortly after buying the property in 1936, plaintiff Mary Joseph and her husband built a picket fence along the southern boundary of the property. The fence extended from the end of an existing rock wall on the east to the southwestern corner of the property. Mr. and Mrs. Joseph landscaped the property up to the fence. The Josephs built the fence to mark the southern boundary of their property, and at all times while it stood, both they and the Zimmermans' predecessors-in-title treated the picket fence line as the boundary between the two properties.

Some time after 1965, the Josephs alleged, the fence was removed, but fence posts remained along the boundary line.

Free access — add to your briefcase to read the full text and ask questions with AI