RSUI Indemnity Co. v. Lynd Co. (Opinion)
Annotate this CaseThe insured in this case (Insured) managed the insurance needs of more than 100 commercial properties. Insured purchased an excess policy from Insurer. The excess insurance policy limited the coverage to “the least” of three alternative amounts. When Hurricane Rita hit the Gulf Coast, the hurricane damaged fifteen of the properties at issue. Insurer calculated “the least” of the three alternative limits separately for each covered item at each damaged property, on an item-by-item basis. Insured filed suit against Insurer to recover the difference between its losses and the amount that Insurer had paid, contending that “the least” of the three limits applied just once in any one occurrence to the total of all losses from all covered items at all of the damaged properties. The trial court agreed with Insurer’s construction of the policy and ordered that Insured pay nothing. The court of appeals reversed, concluding that Insured’s construction was correct, and awarded Insured $7.5 million. The Supreme Court affirmed, holding (1) both constructions are reasonable, and the policy is therefore ambiguous; and (2) because the Court’s rules require it to construe an insurance policy’s ambiguous coverage limitation in favor of coverage for the insured, the court of appeals’ judgment is affirmed.
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