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Venture Encoding Serv. v. Atl. Mut. Ins. Co.

Court of Appeals of Texas, Second District, Fort Worth

May 1, 2003, Delivered

NO. 2-02-020-CV

Opinion

 [*732] OPINION ON REHEARING

Atlantic Mutual Insurance Company, appellee, has filed a motion for rehearing, which we hereby deny. We withdraw our prior opinion and judgment of October 10, 2002 and issue this new opinion to address some of the issues appellee and the dissent to our opinion on rehearing have raised.

Venture Encoding Service, Inc., appellant, appeals from the trial court's grant of summary judgment in favor of Atlantic Mutual Insurance Company, appellee, in connection with appellant's insurance claim against appellee, its insurer, under its printing errors and omissions coverage. We reverse and render in part and remand in part.

Factual Background

Appellant is a Fort Worth, Texas based printing company. Under the terms of its agreement with one of its customers, Sallie Mae Servicing Corporation, it was to produce, print, and mail customer coupon payment books to Sallie Mae's customers. In mid-July 2000, appellant printed and mailed 568,875 coupon payment books directly to Sallie Mae customers per [**2]  the agreement. Unfortunately, it printed the wrong lock box payment return address on 328,799 of them. Appellant reprinted the erroneous books with the correct lock box and re-mailed new ones to those customers who had received the defective ones. The cost of reprinting and re-mailing was $ 122,888.

The summary judgment evidence showed that appellant acquired a commercial general liability policy (CGL Policy) with a one million dollar "Printers Errors and Omissions Policy" (Printers E & O Policy) rider from appellee. Appellant paid $ 7,084 for the CGL Policy and an additional $ 2,806 for the Printers E & O Policy. Appellant filed a claim with appellee under the Printers E & O Policy for the $ 122,888. Appellee denied the claim, which resulted in this suit.

Both parties filed motions for summary judgment. Appellee moved for summary judgment on one theory: that the exclusion clause of the Printers E & O Policy applied to the costs or damages incurred by appellant because the reprinting was for the "correction, repair or replacement of property damage" to appellant's product. The trial court granted appellee's motion. This appeal followed.

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107 S.W.3d 729 *; 2003 Tex. App. LEXIS 3768 **

VENTURE ENCODING SERVICE, INC., APPELLANT v. ATLANTIC MUTUAL INSURANCE COMPANY, APPELLEE

Subsequent History: Petition for review denied by Atl. Mut. Ins. Co. v. Venture Encoding Serv., 2003 Tex. LEXIS 678 (Tex., Oct. 3, 2003)

Prior History:  [**1]  FROM THE 17TH DISTRICT COURT OF TARRANT COUNTY.

Disposition: Reversed in part; judgment rendered in part; remanded.

CORE TERMS

insured, coverage, Printers, damages, property damage, printing, summary judgment, replacement, costs, tangible property, products, repair, correction, sistership, obligated, contends, legally obligated to pay, economic damages, physical injury, omissions, policies, liability policy, business risk, loss of use, withdrawal, customers, parties

Civil Procedure, Appeals, Summary Judgment Review, Standards of Review, Judgments, Summary Judgment, General Overview, Insurance Law, Commercial General Liability Insurance, Exclusions, Contracts Law, Defenses, Ambiguities & Mistakes, Claim, Contract & Practice Issues, Policy Interpretation, Question of Law, Contract Interpretation, Ambiguous Terms, Construction Against Insurers, Ordinary & Usual Meanings, Business Insurance, Property Claims, Types of Insurance, Malpractice & Professional Liability Insurance, Errors & Omissions Policies, Directors & Officers Liability Insurance