PJC Business

C ONTRACTS

PJC 101.60

PJC 101.60 Insurance Contracts—Conditions Precedent and Prejudice (Comment) Burden of proving compliance. “A party seeking to recover under a contract bears the burden of proving that all conditions precedent have been satisfied.” Associ ated Indemnity Corp. v. CAT Contracting, Inc. , 964 S.W.2d 276, 283 (Tex. 1998). “Conversely, if an express condition is not satisfied, then the party whose performance is conditioned is excused from any obligation to perform.” Solar Applications Engi neering, Inc. v. T.A. Operating Corp. , 327 S.W.3d 104, 108 (Tex. 2010); see Harwell v. State Farm Mutual Automobile Insurance Co. , 896 S.W.2d 170, 173–74 (Tex. 1995). Conditions precedent defined; creation of condition precedent; conditions not favored. These principles are discussed at PJC 101.33. Prejudice—burden of proof. An insured’s failure to comply with a condition precedent does not relieve the insurer of liability unless that failure prejudices the insurer, and the insurer has the burden to show prejudice. Prodigy Communications Corp. v. Agricultural Excess & Surplus Insurance Co. , 288 S.W.3d 374, 382–83 (Tex. 2009); PAJ, Inc. v. Hanover Insurance Co. , 243 S.W.3d 630, 636–37 (Tex. 2008); Har well , 896 S.W.2d at 174. Form of questions. If there is a fact issue about whether the insured complied with a condition precedent, a question similar to PJC 101.57 and 101.58 that tracks the contract language and places the burden on the insured should be submitted: QUESTION ______ Did Paul Payne [ notify the insurer of the suit/give notice of the claim as soon as practicable/etc. ]? See Prodigy Communications Corp. , 288 S.W.3d at 382–83; Harwell , 896 S.W.2d at 174. If raised by the evidence, a question asking whether the insurer was prejudiced should be submitted, conditioned on a finding that the insured failed to comply. See Prodigy Communications Corp. , 288 S.W.3d at 382–83; Harwell , 896 S.W.2d at 174. QUESTION ______ Was Insurer, Inc. prejudiced by Paul Payne ’s failure to [ notify the insurer of the suit/give notice of the claim as soon as practicable/ etc. ]? When to use. These questions would be proper if failure to comply with a condi tion precedent precludes liability. When the remedy for failure to comply with a condi tion precedent is abatement, the matter would be handled before trial, so no jury question should be submitted. See Philadelphia Underwriters ’ Agency of Fire Insur-

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