Fifth Circuit Leans on Well-Established Contractual Interpretation Doctrine to Preclude Coverage Under General Liability Policy

To paraphrase Justice Oliver Wendell Holmes Jr., a case ‘which appeals to the feelings and distorts the judgment’ makes bad law. In the face of exceptionally tragic circumstances, however, the Fifth Circuit Court of Appeals resisted the urge to let its emotions carry the day.

In Scottsdale Insurance Co. v. Discovering Me Academy LLC, the court instead adhered to well-established principles of Texas contract law to preclude coverage under a policy issued by Scottsdale Insurance Co. based on an automobile exclusion in Discovering Me Academy’s general liability policy.

On a hot afternoon in July 2018 in Houston, Discovering Me, a local daycare, took a group of 28 children on a field trip to a local park. After returning from the field trip, Discovering Me employees inexplicably miscounted the number of children exiting the van and left a 3-year-old child inside.

The child remained in the van until his father arrived nearly four hours later to pick him up from the daycare, at which point he had become unresponsive from heat exhaustion.