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Click here for the full text of this decision FACTS:Jimmie and Judith Huffhines sold their townhouse to George and Sharon Heaton in March 1998. The Heatons’ new next door neighbor, Mary Piper, sued the Heatons for various defects to the Heatons’ property that Piper said were damaging her residence. Piper alleged that the Heatons breached their duty to Piper to maintain and repair their property in a reasonably prudent manner. The Heatons then sued the Huffhineses. In their original third-party petition, the Heatons alleged that the Huffhineses “were on notice of the alleged problems made the basis of this suit, and failed to disclose same to the Heatons.” They alleged claims of common law fraud, statutory fraud, DTPA violations and negligence. The Huffhineses then sued State Farm Lloyds and State Farm Fire and Casualty Co. to get those insurers to defend them against the Heatons’ suit. The Heatons filed a second petition, slightly modifying the facts to include specific dates that Piper’s property started becoming damaged. Negligence was set forth as the first cause of action, and it was alleged that the Huffhineses failed to effectively repair the problems that led to Piper’s property damage, and that the Huffhineses failed to disclose the townhouse’s defects. The Heatons again alleged common law fraud, statutory fraud, and DTPA violations, and sought contribution, damages, and attorneys’ fees. Though State Farm agreed to defend against the amended petition, the trial court ruled that State Farm did not have a duty to defend against the Heatons’ original petition or to indemnify the Huffhineses under the same petition. HOLDING:Affirmed. The court confirms that the State Farm’s homeowner’s policy states that a defense will be provided “[I]f a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies.” The policy further defined “occurrence” as “an accident, including exposure to conditions, which results in bodily injury or property damage during the policy period.” State Farm’s umbrella policy defines “loss” as “an accident that results in personal injury or property damage during the policy period,” and “includes injurious exposure to conditions.” State Farm argues that the term “occurrence” in the homeowner’s policy and the term “loss” in the umbrella policy both require the existence of an “accident.” Even though the policy does not define “accident,” the court agrees with State Farm. The court, like State Farm, relies on Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819 (Tex. 1997), in which the state’s high court decided the insured’s intentional tort that resulted in unintended injuries was not an accident, and thus not an occurrence. Here, the Heatons alleged in their original Petition that the Huffhineses assured the Heatons that they were not aware of defects of their townhouse when they nonetheless had knowledge of such defects, including the specific water-encroachment problem Piper identified in her suit. The court concludes that the allegations in the original petition did not set forth an accident as defined by Cowan. “Absent an”accident’ there can be no”occurrence’ under [the Huffhineses'] homeowners policy and no”loss’ under their umbrella policy. Thus, the Heatons did not allege facts within the scope of [the Huffhineses'] insurance policies, and State Farm was not required to defend [the Huffhineses] against Heatons’ Original Third Party Petition.” The Huffhineses try to get around this conclusion by arguing that the Heatons’ claim for contribution in the original petition, based on Piper’s allegation of negligence, triggers coverage. The court says the Huffhineses have not pointed to any policy provision that would justify coverage under these circumstances. The Huffhineses also argue that State Farm should have to defend because the Heatons raised a negligence claim in the original petition. The court reminds the Huffhineses that a mere characterization of a claim as negligence is not enough to convert a claim of knowing misrepresentation into a claim for recovery of property damage caused by an accident within the meaning of the insurance policies. The court also rules that the intentional nature of the Huffhineses’ conduct does not support a duty to defend. Under Cowan, it is the effect of intentional conduct that determines whether an event is an accident, not to the mere allegation of intentional conduct. OPINION:Guzman, J.; Edelman, Seymore and Guzman, JJ.

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