recognizing that court must read all parts of a contract together to ascertain the parties’ agreement, and “[n]o one phrase, sentence, or section [of a contract] should be isolated from its setting and considered apart from the other provisions.”
How later courts described this case
- recognizing that court must read all parts of a contract together to ascertain the parties’ agreement, and “[n]o one phrase, sentence, or section [of a contract] should be isolated from its setting and considered apart from the other provisions.”
- discussing the “long-established rule that ‘[n]o one phrase, sentence, or section [of a contract] should be isolated from its setting and considered apart from the other provisions’ ” (quoting Guardian Trust Co. v. Bauereisen, 132 Tex. 396, 121 S.W.2d 579, 583 (1938))
- stating that in interpreting a contract, each part should be given effect, and a more specific provision must be read as controlling, when applicable, over a more general provision
- holding that when one provision of a contract defines an obligation generally and another provision sets limits on that obligation, the more specific provision controls
Written by the judges who cited it.
The opinion
[January 5, 1994]
In again rejecting Amy's plea for relief, the majority leaves all Texans without the security that should be at very core of health insurance.
At least today's substituted opinion has abandoned footnote five of the majority's prior writing, which suggested that ambiguities are not to be resolved against the insurer in an ERISA plan. See 36 Tex.Sup.Ct.J. 860, 864 n. 5. I have previously explained the reasons for rejecting this regressive rule. See 36 Tex.Sup.Ct.J. 860, 865-66, 869 (Doggett, J., dissenting).
However, the decision announced today remains wrong now for the other reasons it was wrong before, specifically the same "sweeping anti-consumer alteration of our longstanding method for interpreting insurance policies." Id. at 866. For this reason, I continue to dissent.
DISSENTING OPINION ON MOTION FOR REHEARING [May 5, 1993. * ]
DOGGETT, Justice, dissenting.
With the switch of a vote on rehearing, the law announced in this case a short while ago is no longer the law. Continuing to believe that this court's prior decision was correct, I incorporate it fully in this opinion. 1 See
Appendix A.
The new majority opinion rejects our recent determination in Gorman v. Life Ins. Co. of North Am., 811 S.W.2d 542 , 547-48 (Tex. 1991), and a substantial body of federal law 2
in refusing to treat Amy Miller's breach of contract pleading as a claim for benefits due under ERISA. See 36 Tex.Sup.Ct.J. 860, 863-864. This misapplication of the doctrine of federal preemption 3 is sufficient to achieve an Aetna victory and to create considerable injustice for Amy and others like her who have already secured judgments based on determinations that they have been illegally denied health care benefits. Unfortunately this is not enough for the majority when even more mischief can be accomplished by reaching out to address state law issues totally unnecessary to this judgment. First, in dicta it embraces the minority view that ambiguities in ERISA plans are not construed in favor of coverage. See id. at 864-865 n. 5. Despite then having two independent bases upon which to render judgment for Aetna, the majority then moves on to enact a sweeping anti-consumer alteration of our longstanding method for interpreting insurance policies.
Contrary to the repeated writings of this court in Balderama v. Western Casualty Life Ins. Co., 825 S.W.2d 432 , 434 (Tex. 1991); National Union Fire Ins. Co. v. Hudson Energy Co., 811 S.W.2d 552 , 555 (Tex. 1991); Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663 , *Page 136
666 (Tex. 1987); and many others, ambiguities will now be construed against the insurer only after the court attempts to remove any ambiguity through manipulation of general rules of contract interpretation. 36 Tex.Sup.Ct.J. at 864-865 n. 5. While it has never been, nor should it be, the law of Texas that an insured creates an ambiguity merely by filing suit, any policy subject to reasonable, conflicting interpretations had, until today, been considered ambiguous. But now the majority declares that, if the insurer creates an ambiguity by taking away in specific fine print most of the rights accorded the policyholder in the big print, the fine print will control. If courts always look to the whole document and must read even directly conflicting provisions together "to ascertain the agreement between the parties," 36 Tex.Sup.Ct.J. at 864, no insurance policy will ever be held ambiguous, and individual provisions that could reasonably be read to provide coverage will be uniformly ignored.
Amy Miller, a young quadriplegic, now leaves this court with nothing — without any of the means that a judge and jury in Lubbock, Texas thought essential to meeting her lifetime medical needs over the course of her now bleak future. But even more far-reaching is today's evisceration of previously well established state law designed to provide reasonable protection to insurance policyholders. The impact of today's opinion is potentially devastating to the rights of Texans who rightly expect their premiums to pay for more than the paper on which their policies are written. I dissent.
HIGHTOWER, GAMMAGE and SPECTOR, JJ., join in this opinion.
* Editor's Note: The court's May 5, 1993 Opinion on Motion for Rehearing was withdrawn and substituted January 5, 1994. Justice Doggett's May 5, 1993 Dissenting Opinion stands as delivered.
1 This is the approach employed by then Justice Calvert when he experienced a similar change on rehearing. See Pan Am. Life Ins. Co. v. Andrews, 161 Tex. 391 , 340 S.W.2d 787 , 796 (1960) (Calvert, J., dissenting) ("My views of the case and concerning a proper decision . . . remain the same as when they were expressed as the views of the majority in the attached opinion, and I accordingly now file the opinion as a dissent."). My prior opinion makes reference to Justice Cornyn's original dissent, which is found at 36 Tex.S.Ct.J. 148 (Nov. 6, 1992).
2 See Appendix A, infra at 136.
3 Overly expansive interpretation of the preemptive scope of the Employees' Retirement Income Security Act (ERISA), has substantially barred the application of state law to group insurance policies. See Cathey v. Metropolitan Life Ins. Co., 805 S.W.2d 387 , 394 (Tex. 1991) (Doggett, J., concurring) ("ERISA has become 'quicksand' that 'will continue to expand and to preempt everything in its meandering path' ") (quoting Jordan v. Reliable Ins. Co., 694 F. Supp. 822 , 835 (N.D.Ala. 1988)).