Trinity Universal Insurance Company and Trinity Lloyd's Insurance Company v. Nicole Cowan, Individually and as Assignee of Gregory D. Gage

TRINITY UNIVERSAL

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-94-00404-CV

Trinity Universal Insurance Company

and Trinity Lloyd's Insurance Company, Appellants

v.

Nicole Cowan, Individually and as Assignee of Gregory D. Gage, Appellee

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT

NO. 93-07544, HONORABLE MIKE LYNCH, JUDGE PRESIDING

Appellee Nicole Cowan took a default judgment in a personal injury lawsuit against

Gregory Gage in the amount of $250,000 in actual and punitive damages. Gage was covered by

a Texas homeowners insurance policy issued by Trinity Lloyd's Insurance Company; therefore,

Cowan sued Trinity Universal Insurance Company and Trinity Lloyd's Insurance Company

("Trinity") in the instant cause. Cowan obtained a partial summary judgment on March 30, 1994,

in which the trial court found insurance coverage but did not adjudicate damages. On May 9,

1994, the trial court rendered final judgment for Cowan in the amount of $373,225, representing

the amount of the underlying judgment, accrued interest, and attorney's fees. Trinity challenges

the trial court's judgment in four points of error. We will affirm the judgment of the trial court.

BACKGROUND

In January 1992, Trinity issued a homeowners insurance policy to the parents of

Gregory Gage, under which Gage was an additional insured. The cause of action giving rise to

the underlying suit developed while Gage was employed as a photo lab clerk at H.E.B. Photo

Place. A roll of film containing pictures of Cowan was delivered to H.E.B. for developing.

Some of the pictures were provocative, and Gage made extra prints of several of the photographs

and took them home. He later showed the pictures to a few of his friends and left the pictures

with one friend with instructions to throw them away when he was through with them. It is

undisputed that Gage never intended to injure Cowan in any way. However, the friend Gage

entrusted with the pictures disregarded his instructions and showed the pictures to an individual

who turned out to be Cowan's friend. Cowan thereby learned of Gage's actions.

Cowan filed the underlying lawsuit against Gage and H.E.B., alleging negligence

and gross negligence, among other claims. Gage notified Trinity of the lawsuit and requested a

defense and indemnity. Although Trinity initially provided Gage with a defense under a

reservation of rights, upon investigation of Cowan's claims Trinity concluded that her damages

were not covered by the insurance policy and denied Gage coverage and any further defense.

Gage subsequently agreed to assign any and all claims he had against Trinity to Cowan in

exchange for a covenant not to execute against any of his assets except for the homeowners

insurance policy, and the case proceeded to trial on May 17, 1993. Gage failed to appear, and

Cowan put on evidence before the trial court. After hearing the evidence, the trial court found

that Gage's negligence and gross negligence proximately caused Cowan's injuries and rendered

a $250,000 judgment against him.

Cowan then filed the instant suit against Trinity. She asserted a direct claim against

Trinity as judgment creditor of its insured, and she also alleged as assignee of Gage that Trinity

had committed various common law and statutory bad faith insurance practices that caused damage

to Gage. The parties filed cross-motions for summary judgment. Cowan moved for partial

summary judgment solely on the issue of insurance coverage, and Trinity moved for summary

judgment on the issue of insurance coverage as well as bad faith. After a hearing, the trial court

granted Cowan's motion for partial summary judgment and denied Trinity's motion, leaving many

issues for resolution at trial, including damages, Trinity's liability under various bad faith causes

of action, and attorney's fees.

On the eve of trial, Cowan and Trinity settled the case. The Compromise and

Settlement Agreement essentially provided that Trinity would agree to a judgment in the amount

of the $250,000 underlying judgment, postjudgment interest, and $100,000 in attorney's fees, and

in exchange Cowan waived all claims for extracontractual damages over and above the

aforementioned sums. The settlement agreement expressly reserved Trinity's right to appeal the

issues of coverage and the amount of the underlying judgment:

2. On appeal, Trinity Lloyd's is limited to raising only two issues; (1) whether

the Court's rulings on insurance coverages in the [summary judgment] Order

dated March 30, 1994 were correct, and (2) whether Trinity Lloyd's is bound

by the face amount ($250,000) of the Final Judgment in the underlying case

attached hereto as Exhibit A.

3. Solely for the purposes of appealing issue No. 2 as set forth in paragraph 2

above, the following facts are stipulated:

* * * * *

g. $100,000.00 is a reasonable and necessary attorneys' fee for plaintiff and

plaintiff is entitled to $100,000.00 as an attorneys' fee in the event Trinity

Lloyd's does not prevail on appeal.

The final judgment, which was "approved as to form" by the parties, was signed at an uncontested

docket on May 9, 1994.

DISCUSSION

A. Effect of the Settlement Agreement and Final Judgment

We must dispose of a preliminary issue Cowan raises before addressing the four

points of error Trinity advances. Cowan contends that this appeal should be dismissed, or

alternatively, the trial court's final judgment should be affirmed because Trinity agreed to the final

judgment below. According to Cowan, although the settlement agreement "contemplates" an

appeal, the agreement does not state that the settlement was subject to an appeal nor did Trinity

expressly reserve the right of appeal in either the settlement agreement or the "agreed final

judgment." Moreover, argues Cowan, Texas law does not allow an appeal from an agreed final

judgment.

A party cannot appeal from or attack a judgment to which he or she consented or

agreed. See Gillum v. Republic Health Corp. , 778 S.W.2d 558, 562 (Tex. App.--Dallas 1989, no

writ). However, the final judgment in the instant cause was not an agreed judgment. The

judgment states that the settlement agreement "had been entered into allowing the entry of this

final judgment." Cowan argues that this statement, coupled with the fact that the judgment was

attached to the settlement agreement as an exhibit and the fact that the agreement specifically

stated that Cowan would present the judgment to the trial court for signature, establishes that this

was an agreed judgment. We disagree.

This Court must look to the circumstances surrounding rendition of the final

judgment and the recitations in the final judgment to determine if in fact it was "agreed." See Hill

v. Bellville Gen. Hosp. , 735 S.W.2d 675, 678 (Tex. App.--Houston [1st Dist.] 1987, no writ).

In examining the circumstances surrounding rendition of the final judgment in the instant cause,

our primary concern is to ascertain the intent of the parties when they entered into the settlement

agreement pursuant to which the judgment was rendered. See Gracia v. RC Cola--7-Up Bottling

Co. , 667 S.W.2d 517, 520 (Tex. 1984). The parties entered into the settlement agreement to

facilitate resolution of the case. In its partial summary judgment, the trial court had determined

that Trinity was liable under the insurance policy. The parties then entered into the settlement

agreement instead of proceeding to trial to adjudicate the remaining issues of damages, Trinity's

liability under various bad faith causes of action, and attorney's fees. In the settlement agreement,

Trinity expressly reserved the right to appeal the issues of coverage and the amount of the

damages in the underlying suit. In addition, the judgment itself evidences the fact that the parties

did not intend to enter into an agreed judgment--the parties approved the judgment "as to form"

only, not "as to form and substance." See Hill , 735 S.W.2d at 678 .

Cowan argues that even if Trinity reserved the right to appeal the coverage issue,

this Court should dismiss the appeal or, alternatively, affirm the trial court's judgment because

her extracontractual and bad faith causes of action are sufficient to support the final judgment,

contending that the settlement agreement itself specifies that the release of "extracontractual and

bad faith common law and statutory causes of action" does not release liability under those

theories up to the amount of the "agreed final judgment." Cowan cites State Farm Fire &

Casualty Co. v. Gandy , 880 S.W.2d 129 (Tex. App.--Texarkana 1994, writ granted), for the

proposition that an insurance company can be liable to its insured for the way a claim was handled

even if it is ultimately determined that there was no coverage. However, this argument is also

contrary to the intent of the parties in entering into the settlement agreement. The parties

expressly anticipated an appeal on the issues of coverage and the amount of the underlying

judgment when they entered into the agreement, and these are the exact issues Trinity raises in

this appeal. For these reasons, we will address the merits of Trinity's appeal.

B. Is Cowan's Claim Covered by the Insurance Policy?

The homeowners policy Trinity issued to the Gages requires that any "bodily

injury" or "property damage" must have been caused by an "occurrence" to fall within the scope

of coverage. In its first and second points of error, Trinity argues that the trial court erred in

granting Cowan's motion for partial summary judgment because there was neither an "occurrence"

nor "bodily injury" required to trigger insurance coverage.

The standards for reviewing a motion for summary judgment are well established:

(1) The movant for summary judgment has the burden of showing that no

genuine issue of material fact exists and that it is entitled to judgment as a

matter of law.

(2) In deciding whether there is a disputed material fact issue precluding

summary judgment, evidence favorable to the nonmovant will be taken as

true.

(3) Every reasonable inference must be indulged in favor of the nonmovant and

any doubts resolved in its favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985).

1. Meaning of "Occurrence"

Trinity's first point of error raises the issue of the meaning of "occurrence" under

the homeowners policy issued to the Gages. The Trinity policy defines "occurrence" as "an

accident , including exposure to conditions, that results in bodily injury or property damage during

the policy period." (Emphasis added.) Cowan contends that the meaning of "occurrence" has

been established by a long line of Texas precedent. An occurrence, Cowan urges, "takes place

where the resulting injury or damage was unexpected or unintended, regardless of whether the

policyholder's acts were intentional." Hartford Casualty Co. v. Cruse , 938 F.2d 601, 605 (5th

Cir. 1991) (applying Texas law). According to Cowan, because it is undisputed that Gage did not

intend to injure her, (1) there was an unintentional injury, and thus an "occurrence," triggering

coverage under the policy.

Trinity urges us to interpret occurrence to restrict coverage to exclude intentional

conduct resulting in an unintentional injury. Under Trinity's definition of occurrence, a

policyholder is denied coverage for deliberate tortious acts, even if the resulting injury or damage

is unintentional. In order to distinguish the line of cases Cowan cites, Trinity argues that the

Texas homeowners policy had been revised effective October 1, 1990, and that the cases Cowan

cites interpret the former occurrence definition rather than the definition at issue in the instant

cause. However, Trinity cites no authority supporting its restrictive definition.

We hold that an occurrence takes place where the resulting injury or damage was

unexpected or unintended, regardless of whether the policyholder's acts were intentional.

Occurrence is defined under the Trinity homeowners policy as an "accident." Since accident is

not defined in the policy, we consider the term's generally accepted meaning. See Birdwell v.

Ferrell , 746 S.W.2d 338, 340 (Tex. App.--Austin 1988, no writ). Under Texas law, the word

accident has long been held to include unforeseen and unexpected consequences of otherwise

intentional acts. Under this interpretation, if the insured did not know or anticipate that his

intentional act would produce the injury, then as to the insured the injury produced was

unexpected, unforeseen, and, therefore, accidental. See, e.g. , Republic Nat'l Life Ins. Co. v.

Heyward , 536 S.W.2d 549, 557 (Tex. 1976); Pacific Mut. Life Ins. Co. v. Schlakzug , 183 S.W.2d

709, 711 (Tex. 1944); Travelers Ins. Co. v. Volentine , 578 S.W.2d 501, 503 (Tex. Civ.

App.--Texarkana 1979, no writ); see also State Farm Fire & Casualty Co. v. S.S. , 858 S.W.2d

374, 377 (Tex. 1993). (2)

Our holding derives further support from the comments of Don Olson, Chairman

of the Readable Homeowners Advisory Committee. This committee was charged with

recommending changes to the standard Texas homeowners policy. When the 1990 revision of the

Texas homeowners policy was presented to the Texas Board of Insurance, Chairman Olson

informed the Board:

What we have accomplished is a revision of every one of the homeowner

forms and endorsements, and this will be presented today. And this was

accomplished in line with your charge of making sure that there is no restriction

in coverage available to any insured under an existing homeowners policy in

Texas.

Hearing on Property Insurance Rules Concerning Texas Homeowners Policy and Related Matters

Before Texas State Board of Insurance , Board Docket No. 1715, at 5 (Feb. 14, 1990) (transcript

available from State Board of Insurance). (3) Before the 1990 revision, the term occurrence

encompassed claims for unintentional injuries resulting from intentional acts. Because the 1990

revision was not intended to restrict coverage, policies issued after the revision must also cover

unintentional injuries resulting from intentional acts.

Therefore, Gage's conduct fits within the policy definition of occurrence so long

as he neither expected nor intended to cause Cowan's resulting injuries. As even Trinity

concedes, Gage neither intended nor knew with substantial certainty that Cowan would be injured.

However, Trinity attempts to argue on appeal that Gage's intent to injure was at least a fact issue

incapable of summary disposition on the ground that Gage could have reasonably expected

Cowan's injuries to result from his actions. We reject this argument because Trinity failed to

make intent to injure a fact issue in its motion for summary judgment and response to Cowan's

motion. Trinity produced no summary-judgment proof on the issue of Gage's intent to injure;

instead, Trinity relied on its defense that the voluntary and intentional nature of Gage's conduct

rendered Cowan's claim outside the coverage of the policy. Cowan has established as a matter

of law that an intentional act falls within the scope of coverage if it results in unintentional

injuries, and Cowan's undisputed summary judgment evidence established that Gage neither

intended to injure Cowan nor expected her to find out about the unauthorized prints. We

accordingly overrule Trinity's first point of error.

2. Meaning of "Bodily Injury"

In its second point of error, Trinity complains that the trial court erred in granting

Cowan's motion for partial summary judgment because Cowan neither alleged nor proved "bodily

injury" within the coverage of the insurance policy. According to Trinity, Cowan's alleged

"mental anguish" is not bodily injury under Texas law. See Travelers Indem. Co. v. Holloway ,

17 F.3d 113 , 115 (5th Cir. 1994) (holding that "in the context of the policy at issue and the facts

alleged here," allegations of mental anguish do not trigger bodily injury coverage under a Texas

homeowners policy); see also SL Indus., Inc. v. American Motorists Ins. Co. , 607 A.2d 1266,

1273-74 (N.J. 1992) (concluding that mental anguish, "without physical manifestations," is not

bodily injury). Cowan responds that because the phrase bodily injury encompasses emotional

distress with accompanying physical manifestations, she alleged and proved bodily injury within

the policy language.

We hold that an allegation of mental anguish or emotional distress is sufficient to

support evidence and damages for the accompanying physical manifestations. See Bulgerin v.

Bulgerin , 724 S.W.2d 943, 945 (Tex. App.--San Antonio 1987, no writ) ("Since physical

manifestations of mental anguish or distress were closely interrelated and, in fact, inseparable

from mental anguish, they cannot be construed to constitute a new or different cause of action or

a departure from the pleadings.") (emphasis added); see also Mokry v. University of Tex. Health

Science Ctr. , 529 S.W.2d 802, 805 (Tex. Civ. App.--Dallas 1975, writ ref'd n.r.e.). (4) Cowan

alleged damages for mental anguish in her pleadings, and the evidence at the trial of the

underlying case established that she suffered from headaches, stomachaches, and loss of sleep as

a result of her emotional distress.

According to Trinity, a plaintiff's pleadings must allege bodily injury; an allegation

of "mental anguish" does not raise a claim for the resulting physical manifestations. In support

of its argument, Trinity cites Holloway and the "complaint allegation rule." However, Trinity's

arguments are unpersuasive. Holloway is distinguishable because it involved pure mental anguish

with no mention of any accompanying physical manifestations. The court explained, "To

determine whether the policy covers the . . . lawsuit, we look to the facts of the underlying claim.

There are not facts in the record evincing any injury other than emotional distress." Id. at 115

(citation omitted). The court's holding thus rested in part upon the facts of the underlying claim,

which failed to include evidence of physical manifestations. In contrast, the evidence in the

underlying case in the instant cause revealed physical manifestations of Cowan's mental anguish.

The complaint allegation rule Trinity cites enables an insurer to rely on the

plaintiff's allegations in determining whether the facts are within coverage. See Fidelity &

Guaranty Ins. Underwriters, Inc. v McManus , 633 S.W.2d 787, 788 (Tex. 1982). However, we

have concluded that an allegation of mental anguish implicitly raises a claim for the resulting

physical manifestations. We hold that the trial court did not err in granting summary judgment

to Cowan because she pleaded and proved bodily injury within the scope of the homeowners

policy and, therefore, overrule Trinity's second point of error.

C. Can an Insurer Challenge Reasonableness of Damages Found in Underlying Case?

Before we address the merits of Trinity's third and fourth points of error, we must

dispose of Cowan's contention that Trinity's third and fourth points of error cannot serve as a

basis for reversal of the trial court's judgment because neither ground was presented to the court

in the response to Cowan's motion for partial summary judgment. See Tex. R. Civ. P. 166a(c)

("[I]ssues not expressly presented to the trial court by written motion, answer or other response

shall not be considered on appeal as grounds for reversal."); City of Houston v. Clear Creek Basin

Auth. , 589 S.W.2d 671, 678 (Tex. 1979). Cowan further argues that neither issue was presented

to the trial court at any other time before rendition of the final judgment. See Pirtle v. Gregory ,

629 S.W.2d 919, 920 (Tex. 1982) ("The reason for the requirement that a litigant preserve a trial

predicate for complaint on appeal is that one should not be permitted . . . to complain about an

error at trial and then surprise his opponent on appeal . . . .").

While Cowan's arguments would be persuasive in the context of a summary

judgment disposing of all matters in controversy, the instant cause involved a partial summary

judgment, which resolved only the issue of insurance coverage. The settlement agreement

pursuant to which final judgment was rendered specifically provided that Trinity reserved the right

to appeal the issue of whether Trinity was bound by the $250,000 face amount of the underlying

judgment. Therefore, we will address Trinity's remaining two points of error.

In its third point of error, Trinity challenges the reasonableness of the $250,000

underlying damage award. According to Trinity, Gage breached his obligation to defend Cowan's

lawsuit against him with due diligence and reasonable prudence, thus precluding enforcement

against Trinity of the resulting excessive damage award. In response, Cowan contends that

Trinity is barred from collaterally attacking the reasonableness of the underlying damage award.

In Employers Casualty Co. v. Block , 744 S.W.2d 940 (Tex. 1988), the supreme

court unequivocally held that an insurer was barred from collaterally attacking the reasonableness

of damages in an agreed judgment between the insured and the injured party--herein Gage and

Cowan. Id . at 943. "A collateral attack is an attempt to avoid the effect of a judgment in a

proceeding brought for some other purpose." Ranger Ins. Co. v. Rogers , 530 S.W.2d 162, 167

(Tex. Civ. App.--Austin 1975, writ ref'd n.r.e.). In Ranger Insurance , a case cited with approval

in Block , this Court noted that an insurance company was not a stranger to a suit against its

insured because the insurer had notice of the suit and had been offered the opportunity to defend

the suit. Therefore, the insurance company was barred from collaterally attacking the terms of

a consent judgment between the insured and the injured party. Id.

In an effort to distinguish Block , Trinity cites section 75 of the Restatement of

Judgments and contends that insureds, "being among the class of indemnitees covered by section

75," must defend themselves with "due diligence and reasonable prudence" as a condition of

indemnification, or "the adversary process that justifies collateral estoppel is absent." See

Restatement (Second) of Judgments § 75 (1982). However, Trinity's argument fails to distinguish

between a collateral attack of a final judgment and the doctrine of collateral estoppel , which bars

relitigation of specific issues. The supreme court in Block clarified the distinction:

"A collateral attack is an attempt to avoid the effect of a judgment in a proceeding

brought for some other purpose." Collateral estoppel refers to issue preclusion

because it bars relitigation of any ultimate issue of fact actually litigated and

essential to the judgment in the prior suit.

Block , 744 S.W.2d at 943 (citations omitted). In Block , the supreme court addressed two separate

issues: (1) whether an insurer can collaterally attack an agreed judgment by litigating the

reasonableness of the damages; and (2) whether collateral estoppel bars the insurer from

contesting coverage in the claimant's suit against the insurer. With regard to the latter issue, the

court held that because the agreed judgment between the insured and the injured party did not

establish coverage, the insurer was free to contest coverage "since this does not constitute a

collateral attack on the liability judgment." Id. The court then went on to determine whether the

doctrine of collateral estoppel applied to bar litigation of the coverage issue and held that the

insurer was not precluded from litigating the issue of coverage. With regard to the first issue, the

court clearly held that an insurer cannot collaterally attack the reasonableness of the underlying

damage award. We are thus unpersuaded by Trinity's attempts to distinguish Block 's holding.

A collateral attack may be made upon a judgment in limited circumstances

involving the jurisdiction or capacity of the court rendering judgment. Id. Trinity attempts to

collaterally attack the underlying judgment upon neither of these grounds but instead upon the

ground that the amount of the underlying judgment was unreasonable because Gage failed to

diligently defend himself against Cowan's claims. The unreasonableness of the underlying

judgment is not a permissible ground for a collateral attack. Id. Trinity makes much of the fact

that after Gage entered into an agreement assigning his claims against Trinity to Cowan in

exchange for her covenant not to execute, he failed to appear at trial to defend himself and thus

allowed entry of a default judgment. Trinity argues that because Gage failed to defend himself

against Cowan's claims, Trinity should not be bound by the amount of the underlying judgment.

However, both Block and Ranger Insurance involved consent judgments in which the insured

made no attempt to put on a defense against the injured plaintiff.

Thus, it is clear that an insured's failure to defend himself diligently does not

provide the insurer with grounds for collaterally attacking the underlying judgment. We hold that

where a judgment is rendered against an insured, the insurer is bound by the amount of the

underlying judgment. We accordingly overrule Trinity's third point of error.

D. Is Apportionment of Damages Required?

Trinity argues in its fourth point of error that the trial court erred in rendering

judgment for Cowan in the amount of the underlying judgment without apportioning covered

damages for bodily injury from the non-covered damages for mental anguish. Trinity reasons that

even if Cowan was entitled to recover damages for the physical manifestations of her mental

anguish, the homeowners policy did not cover her remaining damages arising from her mental

anguish. In response, Cowan contends that apportionment of damages was not required because

physical manifestations of emotional distress are inseparable from the underlying emotional

distress and because the policy at issue in the instant cause makes no mention of an apportionment

of damages. We agree with both contentions.

We have already determined that a plaintiff's emotional distress and resulting

physical manifestations constitute bodily injury. We reject Trinity's more restrictive view that

only the physical manifestations resulting from mental anguish constitute bodily injury because

the accompanying physical manifestations are inseparable from the underlying mental anguish.

Therefore, apportionment was unnecessary because all of Cowan's damages constitute bodily

injury.

Moreover, the policy at issue plainly provides that if suit is brought for bodily

injury caused by an occurrence to which coverage applies, the insurer will pay "for the damages

for which the insured is legally liable." We have previously rejected Trinity's apportionment

argument in a case involving similar policy language. In American Home Assurance Co. v.

Safway Steel Products Co. , 743 S.W.2d 693 (Tex. App.--Austin 1987, writ denied), the insurer

argued that the insurance policy did not cover punitive damages. The insurance policy at issue

provided that the insurer agreed to pay "all sums" which the insured became legally obligated to

pay as "damages." This Court held that the term "damages" encompassed both punitive and

compensatory damages, reasoning that the average insured would expect protection against

liability for all sums that the insured became obligated to pay. Id. at 702 . In the instant cause,

although the insurer did not agree to pay "all sums," it did agree to pay "up to our limit of

liability." The policy defines "limit of liability" as the total liability "for all damages resulting

from any one occurrence ." We therefore interpret the policy to provide that once coverage was

triggered by an accidental bodily injury, Trinity became obligated to pay all sums for which Gage

was held liable. Trinity's fourth point of error is overruled.

CONCLUSION

Having overruled all of Trinity's points of error, we affirm the judgment of the trial

court.

Jimmy Carroll, Chief Justice

Before Chief Justice Carroll, Justices Aboussie and B. A. Smith

Affirmed

Filed: August 16, 1995

Publish

1. In its brief, Trinity acknowledges that "[t]he only thing Gregory Gage did not intend

was Nicole Cowan finding out what he had done."

2. In S.S. , the supreme court held that damage may be unintended though the acts causing

the damage were intentional. Although the case involved an intentional-injury exclusion, not

an occurrence provision, the supreme court looked to Republic National and the construction

of the term "accidents" in reaching its holding, recognizing that "the same reasoning applies in

cases when the policy contains an intentional injury exclusion." S.S. , 858 S.W.2d at 377 .

Therefore, S.S. provides persuasive guidance for our analysis.

3. Although the transcript of the hearing was not a part of the record on appeal, this

Court has the authority to take judicial notice of it. Rule 201(b)(2) of the Texas Rules of

Civil Evidence provides that "[a] judicially noticed fact must be one not subject to

reasonable dispute in that it is . . . (2) capable of accurate and ready determination by

resort to sources whose accuracy cannot reasonably be questioned." Tex. R. Civ. Evid.

201(b)(2). Rule 201(f) authorizes judicial notice to be taken "at any stage of the

proceeding." Id . 201(f). We acknowledge that an appellate court should be reluctant to take

judicial notice when the trial court was not requested to do so and was not given an

opportunity to examine the necessary source material. See Sparkman v. State , 519 S.W.2d

852, 855 (Tex. 1975). However, the fact that the trial court was not requested to take judicial

notice of the hearing transcript in the instant cause is inconsequential because the transcript

merely supports the trial court's determination that Cowan's claim was covered by the

insurance policy.

4. No Texas court has determined whether pure mental anguish constitutes bodily

injury, as acknowledged by the Fifth Circuit in Holloway . 17 F.3d at 115. Cowan argues

that McGovern v. Williams , 741 S.W.2d 373 (Tex. 1987), supports her proposition that pure

mental anguish constitutes bodily injury. In McGovern , the supreme court was called on to

decide whether loss of consortium is a separate bodily injury to a spouse for purposes of

applying the minimum insurance policy limits contained in a couple's insurance policy. The

case turned on the construction of the phrase bodily injury as used in the insurance statute. Id.

at 374 . The court held that the wife could not recover the policy limit for loss of consortium

because it was a purely derivative claim that arose as a consequence of injuries to her husband.

Id. In explaining its decision, the court suggested that a direct claim for either physical harm

or mental anguish constitutes bodily injury under the statute:

Loss of consortium, therefore, does not involve any allegation of physical harm,

nor does it include an element of mental anguish. Mental anguish is a cause of

action separate and distinct from loss of consortium. In the present case, Mrs.

McGovern neither alleged physical harm nor mental anguish. Her claim for loss

of consortium, therefore, cannot constitute a claim of "bodily injury."

Id. at 374-75 (citation omitted). While this language suggests that pure mental anguish

constitutes bodily injury, we need not decide this issue.