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Click here for the full text of this decision FACTS:Texas Industries Inc. (TXI), the plaintiff, had a cement manufacturing plant with five kilns. TXI obtained property damage and business interruption insurance from Factory Mutual Insurance Co., the defendant. TXI started a previously planned maintenance outage on Kiln No. 5 on Jan. 5, 2003, which was to last until Jan. 16, 2003. On Jan. 7, 2003, a fire damaged Kiln No. 5, but had no effect on the other kilns. As a result of this fire, production was interrupted until Jan. 30, 2003, and full production did not resume until Feb. 3, 2003. There was a 23-day period in which Kiln No. 5 did not operate at all and a four-day period in which partial operation occurred. Ten of the days without any operation were part of the previously planned outage. TXI submitted a business interruption insurance claim for its loss. Both TXI and Factory Mutual agreed the total business interruption loss actually suffered by TXI was $3,916,905. The deductible is subtracted from the amount of loss suffered in order to determine the amount of insurance proceeds to which TXI is entitled. The policy at issue has a deductible for business interruption claims in the amount of “15 Day’s Value Time Element of the Objects Experiencing the Loss or Damage.” Factory Mutual’s calculation of this deductible yielded a deductible of $4,084,323, which was greater than the actual loss suffered by TXI. Factory Mutual accordingly refused to pay for TXI’s business interruption claim. TXI calculated a deductible of $2,571,444, which was significantly less than the actual loss suffered. TXI therefore filed suit seeking the difference between its deductible figure and the actual loss, namely $1,345,461, as well as costs and interest. Both TXI and Factory Mutual filed motions for summary judgment. The district court granted TXI’s motion for summary judgment, and awarded TXI damages in the amount of $1,345,461 plus costs and interest. Factory Mutual filed a motion to reconsider that the district court denied. Factory Mutual timely appealed. HOLDING:Affirmed. In diversity cases including this case, federal courts look to the substantive law of the forum state. Texas contract interpretation law, the court stated, indicated that “[i]f policy language is worded so that it can be given a definite or certain legal meaning, it is not ambiguous and we construe it as a matter of law.” An ambiguity, the court stated, existed only if the contract language is susceptible to two or more reasonable interpretations. When an insurance policy, the court stated, can be given multiple reasonable interpretations, it is a settled rule that policies of insurance will be interpreted and construed liberally in favor of the insured and strictly against the insurer. The deductible for the business interruption at issue, the court stated, is equivalent to “15 Day’s [sic] Value Time Element of the Objects Experiencing the Loss or Damage.” The term in dispute is the “Day’s Value Time Element of the Objects Experiencing the Loss or Damage.” To determine the deductible, TXI started with the total dollar amount of cement that would have been produced at the entire premises during the 27 day period at issue had the fire not occurred: $6,900,388. TXI then divided this total amount by 27, representing the number of days in the period. The result was the “daily time element value” of the entire premises: $255,570. The parties stipulated that Kiln No. 5 produced 67.08 percent of the plant’s total output during the relevant 27-day period, the “full percentage contribution.” Accordingly, TXI multiplied the daily time element value of the entire premises by 67.08 percent to equal the “daily time element value” of Kiln No. 5: $171,430. By multiplying this value by 15, TXI arrived at a deductible of $2,571,444. Thus, the difference between the deductible and the stipulated actual damages was $1,345,461 under TXI’s calculation. Factory disagreed with TXI’s method and calculations, and put forth another method of determining the deductible. But the court found the relevant contract language to be ambiguous as to the proper calculation of the “100% daily Time Element value” of the kiln. As such, it read the contract in accordance with TXI’s interpretation of the deductible calculation language. OPINION:Benavides, J.; Jones, C.J., and Benavides and Stewart, J.J.

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