In summer 2002, the insureds noticed a strange smell in their home. Their HO-B homeowners policy expired that October and they replaced it with a HO-A homeowners policy with the same insurer. When the smell persisted, they had the air in their home tested, but it did not reveal an elevated mold content in the air offered no explanation for the smell.
In 2003, a general contractor inspected the home and found water damage and mold in the crawlspace. They filed a claim with their insurer, who inspected and found an ongoing water leak. Since the HO-A homeowners policy covered only “sudden and accidental” plumbing leaks, the insurer denied the claim. The insured then asked that the claim be considered under their old HO-B policy. The insurer reviewed, then denied based on failure of the insured to comply with the policy condition requiring prompt notice of the claim. The insured sued the insurer for breach of contract. The jury returned a verdict in favor of the insureds on the contract claim, but granted the insurer’s motion for judgment on extra-contractual claims. The insurer appealed the verdict on the contract claim, and the insureds appealed the verdict on the extra-contractual claims.
Although both the insurer and the insured raised numerous issues in arguing their appeals, the court based its decision primarily around the issue of the manifestation trigger of coverage. Case precedent indicated the meaning of the word “trigger” as the event that activated coverage under one or more insurance policies.
The Appellate Court held that the:
The court reversed the decision of the underlying court in favor of the insurer.
Allstate Insurance Company and Allstate Texas Lloyd’s, Appellants v. John Hunter and Wife, Carmen Hunter, Appellees, Court of Appeals of Texas, Fort Worth, November 21, 2007, Reversed.