Reported / Citable
Background
Patrick Sniffen, individually and on behalf of his deceased son, sued CPVF III Cobblestone, LLC and others for wrongful death. The underlying complaint alleged that CPVF permitted a makeshift racetrack to be constructed on its property for social-media and marketing footage. Justin Sniffen was driving a Praga Shifter kart when its racing slick tires encountered pine straw, causing the kart to spin, clip a parked vehicle, and strike a car-hauling trailer. He died from his injuries.
Cincinnati insured CPVF under commercial general liability and umbrella policies. Both policies defined certain off-road vehicles as “mobile equipment,” and the general liability policy excluded injuries arising from the use of mobile equipment in prearranged racing, speed, demolition, or stunting activity. Cincinnati sought declarations that it had no duty to defend or indemnify CPVF, while CPVF sought partial summary judgment establishing a duty to defend and entitlement to statutory or contractual damages.
The Court’s Holding
The court denied Cincinnati’s summary-judgment motion and granted CPVF’s motion in part, holding that Cincinnati owed and continued to owe CPVF a defense in the underlying lawsuit. Applying Texas’s eight-corners rule, the court concluded that the complaint and policies did not conclusively establish that the kart qualified as “mobile equipment.” Competing interpretations of the policy language—including whether the general phrase covering vehicles principally designed for off-road use was limited by the listed examples of bulldozers, farm machinery, and forklifts—left at least a potential basis for coverage.
The court declined to decide Cincinnati’s duty to indemnify because CPVF’s liability and the facts controlling actual coverage had not yet been determined in the underlying litigation. It also denied without prejudice CPVF’s requests for relief under the Texas Prompt Payment of Claims Act and for attorney’s fees under Chapter 38, finding those issues insufficiently briefed and premature given that the court had decided only potential coverage for defense purposes, not actual coverage.
Key Takeaways
- Cincinnati must defend CPVF because the underlying allegations potentially fall within the policies’ coverage.
- The insurer failed to establish as a matter of law that the kart was “mobile equipment” subject to the policies’ exclusions.
- The court left indemnity, prompt-payment liability, and attorney’s fees unresolved pending further developments.
Why It Matters
The decision underscores the breadth of an insurer’s duty to defend under Texas law. When policy language and the underlying allegations leave uncertainty about whether an exclusion applies, courts resolve that uncertainty in favor of the insured at the defense stage.
It also illustrates the distinction between potential coverage sufficient to trigger a defense and actual coverage necessary for indemnification or related statutory recovery. Establishing a duty to defend does not, by itself, resolve whether the insurer ultimately must pay a judgment, settlement, penalties, or attorney’s fees.