# Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd.

> Texas Supreme Court · August 26, 2011 · 54 Tex. Sup. Ct. J. 1683

URL: https://www.frixlaw.com/law-library/cases/9513174

## Case

- **Full name:** The HOUSTON EXPLORATION CO. and Offshore Specialty Fabricators, Inc., Petitioners, v. WELLINGTON UNDERWRITING AGENCIES, LTD., Et Al., Respondents
- **Court:** Texas Supreme Court
- **Decided:** August 26, 2011
- **Citations:** 54 Tex. Sup. Ct. J. 1683; 352 S.W.3d 462; 2011 Tex. LEXIS 641; 2011 WL 3796361
- **Precedential status:** Published
- **Opinion:** Concurrence by Johnson
- **Judges:** Hecht, Wainwright, Medina, Green, Guzman, Johnson, Jefferson, Willett, Lehrmann
- **Cited by:** 128 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9513174

## How later opinions describe it (automated extraction)

- stating that a “written contract must be construed to give effect to the parties' intent expressed in the text as understood in light of the facts and circumstances surrounding the contract's execution, subject to the parol evidence rule”
- rejecting argument that the striking of a provision from a form agreement should be construed as eliminating only a cap on reimbursements, noting "the way to delete the cap was to strike the introductory phrase, '[s]ubject to a sub-limit of US$(Amount)', not to strike the rema…
- holding that parol evidence rule does not “prohibit consideration of surrounding circumstances that inform, rather than vary from or contradict, the contract text”
- explaining that majority believed industry custom governed interpretation of contract but opining that no evidence of such a custom was presented in that case
- noting that such circumstances include "the commercial or other setting in which the contract was negotiated and other objectively determinable factors that give a context to the transaction between the parties"

## Opinion text

Justice JOHNSON,
concurring.
I join parts I and III of the Court’s opinion and its judgment. I write to explain my view of why the stricken language of paragraph 13 can and should be considered for context.
First, the stricken language of paragraph 13 need not be considered in determining the policy’s coverage. As explained in part III of the Court’s opinion and by the court of appeals, 267 S.W.3d 277, 283-87 , the policy is unambiguous regardless of the presence of the stricken language. The policy provides coverage for repairs and vessels engaged in “or about” repairs; it does not provide coverage for vessels on standby for an extended period of time and not actively preparing for, supporting, or engaged in repairs.
Next, this was not a one-size-fits-all insurance agreement. The insurance contract was negotiated based on Offshore’s particular risks. The striking of paragraph 13 and other language from the form policy is an objective reflection of the setting surrounding the creation of the policy; it assists in giving context to how the policy terms were reached through negotiations. See 352 S.W.3d 462 at 474 (Jefferson, C.J., dissenting) (citing 11 Richard A. Lord, Williston on Contracts § 32.7 (4th ed.1999)). The strikings show that the parties negotiating the contract were experienced with the type of coverage being negotiated and that “standby charges” was a term of art reflecting a particular, recognized category of risk. Moreover, the presence of the clause providing a deductible for standby charges does not indicate that the policy covers standby charges as the dissent posits. To the contrary, it indicates the opposite: standby charges were a separate, recognized category of expense. The insuring portions of the policy did not provide cov *474 erage for such charges even though the deductible clause was not stricken.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9513174. Public record. Not legal advice.