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Click here for the full text of this decision FACTS:In 2001, KKM Inc. purchased a one-year insurance policy from the insurers (appellants). When the building collapsed less than one year later on June 6, 2002, KKM submitted a property loss notice to the insurers. The insurers subsequently denied coverage for the claim and filed an action for declaratory judgment, requesting that the trial court declare, among other things, that they have no obligation to pay KKM’s claim. The insurers responded to the suit and filed counterclaims against the insurers for breach of contract and violations of the Texas Deceptive Trade Practices Act. The trial court found that the terms of the policy were ambiguous and submitted the issue of policy coverage to the jury. The jury found that KKM was entitled to coverage and awarded money damages. A final judgment was entered on the verdict. The insurers appealed. HOLDING:Reversed and remanded. Based on the pleadings, evidence, arguments and final judgment issued by the trial court, the court concluded that KKM did not waive its claim for breach of contract. This conclusion, the court stated, is supported by the jury charge, which submitted to the jury questions to establish or negate the essential elements of KKM’s cause of action for breach of contract (namely, the existence of a valid insurance policy covering the denied claim and entitlement to money damages on that claim). As for ambiguity in the insurance contract, the court concluded that the meaning of the policy was uncertain and that the issue was properly submitted to the jury. Finally, the court concluded that the evidence was disputed about whether KKM knew or should have known about the building’s corrosion prior to issuance of the insurance policy. Because the evidence was disputed, the court held that the trial court erred in refusing the insurer’s proposed instruction on the fortuity doctrine, which forbids an insured from collecting on a claim when he knew that the loss would occur at the time he entered into the insurance contract. The court further concluded that the error probably led to the rendition of an improper judgment, as it allowed the jury to reach a verdict without consideration of a defense that was plead, argued and supported by evidence at trial. OPINION:Garza, J.; Castillo, Garza and Wittig, J.J.

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