Extrinsic Evidence
Zurich Am. Ins. Co. v. Nokia, Inc., ___ S.W.3d ___, 2008 WL 3991183 (Tex. 2008) (Jefferson, with O’Neill, Wainwright, Medina, Green, Johnson, Willett concurring)
The underlying suit asserted bodily injury claims from putative class action claimants alleging that radiation emitted by their phones caused biological injury. Zurich agreed to defend under a reservation of rights as did National Union and Federal.
The trial court adjudicated in favor of all three insurers that they had no duty to defend. The court of appeals reversed, finding that bodily injury had been factually asserted as the suit sought damages because of bodily injury and the “business risk” exclusions were inapplicable.
A different result was reached in the Dahlgren case where the claimants disclaimed personal injuries and sought only economic and related equitable relief. The same result was reached by a different panel from the Texas Court of Appeals in Samsung Electronics America, Inc. v. Federal Ins. Co., 202 S.W.3d 372, 383-84 (Tex. App. – Dallas 2006 pet. granted). Nokia was represented by Susman, Godfrey LLP.
The Court, joining opinions from the Fourth Circuit and Ninth Circuit, found that biological injuries alleged by claimants potentially stated a claim for bodily injuries under the policy. The Court analogized the claims to subclinical injuries alleged by plaintiffs who have been exposed to asbestos. The complaints seek as a remedy headsets but also did not disclaim damages for the users’ exposure to RFR. The Court did not reach the issue as to whether headsets and the cost of procuring same could be deemed a form of damages. The “because of bodily injury” element was addressed with the Court finding that the inclusion of claims that are not covered does not negate coverage for those that were potentially covered. It reasoned:
Because past purchasers are alleged to have suffered bodily injury and because they seek damages for those injuries already incurred, the suits fall within the policy language – even if the case also involves claims by those who have not yet purchased wireless telephones. Over-inclusive allegations do not negate the duty to defend; the duty applies if there is a possibility that any of the claims might be covered.
Id. at *7.
The Court, in addressing whether the class actions appropriately sought damages, drew a distinction between the statement that no individuals have been injured and the statement that no individual issues of injury are stated. The fact that the proposed class included only those purchasers who have not been diagnosed “with a brain-related tumor or cancer of the eye” is of no moment since excluding certain classes of injured purchasers does not mean that the putative class had abandoned all claims for damages because of bodily injuries. The Court noted that every court to analyze the issue of whether similar claims were covered reached affirmative results. As the Court noted:
We have repeatedly stressed the importance of uniformity “when identical insurance provisions will necessarily be interpreted in various jurisdictions.” Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 824 (Tex.1997); Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 522 (Tex.1995).
Id. at *7.
The insurers sought to introduce evidence that the plaintiffs introduced in their briefing in the MDL action indicating that their claims were not for bodily injury but solely for economic damages. The Court noted that Texas has not and would not recognize exceptions to the eight-corners rule. GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 308-09 (Tex. 2006). Id. at *8.
The Court also found it was unnecessary to recognize an exception to the eight-corners rule because the MDL cases alleged damages because of bodily injury. Thus, there was no reason to go beyond it to assess this issue.
The Court reached a different result as to the Naquin complaint based on the fact allegations of the amended pleading. The dissent, authored by Justice Hecht, claimed that the Court’s handling of the eight-corners rule rewarded cute and clever pleading that strains credulity, whereas in Naquin, class counsel was forthcoming, affirmatively disclaiming the personal injury damage claims that would destroy the lawsuit. The other claims did not, and thus the bodily injury opportunity remained.
