It's not what you think. I am not here to talk about the propriety of what a daycare charges to take care of a loved one. Instead, I want to talk to you about who defends a daycare when it is alleged to have injured someone in Texas. The resolution of that issue is not as simple as saying the attorney the insurance carrier selects. Below is a factual scenario we will work through.
Daycare operates in Dallas, Texas. Daycare has a van service. Insurance Carrier A maintains the commercial general liability policy. Insurance Carrier B maintains the commercial auto policy. On the day in question, it is alleged that Daycare injured our wheelchair-bound, disabled individual when it was securing her in her wheelchair before transporting her from her home to the van. It is also alleged that Daycare separately injured our individual when she was being loaded into the van because she fell after clearing the threshold.
After sustaining her injuries, the disabled individual files suit against Daycare to recover damages alleging that she was injured while being secured in her wheelchair and being loaded in the van. Daycare contacts its insurance carriers and asks for a defense under the commercial general liability policy and commercial auto policy. Both insurance carriers deny a defense.
The Duty to Defend Under the Commercial Auto Policy
Texas uses the following three-part test for determining whether an injury relates to use of an auto:
1. The accident must have arisen out of the inherent nature of the automobile as such;
2. The accident must have arisen within the natural territorial limits of an automobile, and the actual use must not have terminated; and
3. The automobile must not merely contribute to cause the condition which produces the injury, but must itself produce the injury.
Mid-Continent Cas. Co. v. Global Enercom Mgmt., Inc., 323 S.W.3d 151, 154 (Tex. 2010); Mid-Century Ins. Co. v. Lindsey, 997 S.W.2d 153, 157 (Tex. 1999).
Here, we will concede the first two elements and only address the third element. Wasn't the van just the site where our disabled individual happened to be injured when she fell? The answer to that question is no. The alleged injury that occurred while our individual was being loaded into the van could only have happened because of the van's presence in our situation. Nat'l Cas. Co. v. Western World Ins. Co., 669 F.3d 608, 614 (5th Cir. 2012). Thus, there is a duty to defend under the commercial auto policy.
The Duty to Defend under the Commercial General Liability Policy
I know what you're thinking. Since we already determined that there was use of an automobile under the commercial auto policy, then the "auto use" exclusion under the commercial general liability policy is going to exclude any possibility of a defense under this policy. That seems right, but misses the distinct treatment coverage provisions and exclusions receive.
When looking at a coverage provision, a single alleged injury that falls within coverage triggers the duty to defend. Don's Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20, 24 (Tex. 2008); Utica Nat'l Ins. Co. of Tex. v. Am. Indem. Co., 141 S.W.3d 198, 201 (Tex. 2004). However, when looking at an exclusion, the duty to defend is only negated when every alleged injury falls within the exclusion. Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487, 501 (Tex. 2008)
Here, our disabled individual was also injured when she was secured in her wheelchair prior to being moved to the van. This fact lies outside the "auto use" exclusion of the commercial general liability policy because it occurred prior to her movement to the van. Western World Ins. Co., 669 F.3d at 617 (citing St. Paul Fire and Marine Ins. Co. v. Am. Int'l Surplus Lines Ins. Co., No. 3:95-CV-0790-D, 1997 WL 160192, at *2 (N.D. Tex. Mar. 31, 1997)). Therefore, there is a duty to defend under the commercial general liability policy.
What to Take Away
Remember that every alleged fact matters when determining the duty to defend. If it is possible that an alleged fact could trigger the duty defend, then the duty to defend will most likely be found.