Before we begin this article in an aspect of personal injury law, let us explain that an entity which provides insurance is known as an insurer, insurance company, insurance carrier or underwriter. A person or entity who buys insurance is known as an insured or as a policyholder. One of the most significant cases was the Texas Supreme Court decision in the United Services Automobile Association Texas Lloyds Companies v. Menchaca, 545 S.W.3d 479 (Tex. 2018). The first opinion was issued but the court withdrew its first opinion, and re-issued a new opinion. The court stated its reasoning for the new opinion was to “fulfill our duty to eliminate confusion regarding the court’s previous decisions addressing insureds’ claims against their insurance companies.” Following the new decision, there was a lot of cases reanalyzing holdings in light of this new case and forcing the lower courts to revisit the relevant issues given the new case law. In addition to Menchaca, a federal court investigated the new pre-suit notice laws outlined in Texas Insurance Code section 542A.003, and this gave attorneys the guidance as to how these legalities will be enforce. While another court administered that the insurance company did have a commitment to defend an insured against their claims, she carelessly operated a car, though her husband, who was not on the policy, was driving the car. The court adhered that an insurance company cannot circumlocutorily recover from any injured party, the proceeds which it contractually agreed not to haul into court directly from a third party. And in an UIM case, the court put an end to the contractual and extra-contractual claims, but refused to recede the extra-contractual claims. Extracontractual damages are awarded in “bad faith” claims against insurance companies. They are a form of punitive damages, intended to punish extreme insurer conduct. On an appeal, the insured disputed that accordingly, the Menchaca reduction of extra-contractual claims are no longer required in a UIM, or uninsured motorist, case where the UIM claim is disputed. The court of appeals strongly disagreed, and directed the court to diminish those claims.
Using a personal injury attorney, the person sued the insurance company for settling a car accident claim against him without his permission. The insured, using a personal injury attorney, filed suit in a court alleging fraud, violations of the Chapter 541 of the Insurance Code and Texas Deceptive Trade Practices Consumer Protection Act. The insurance company responded with a no-evidence motions for summary judgment proclaiming that the terms of its insurance policy allowed it to negotiate the claims it found appropriate. There was no evidence it violated the Texas Deceptive Trade Practices Consumer Protection Act, committed fraud, or violated Chapter 541. The court granted the insurance company’s motion and the insured adjured to the county court. The insurance company again filed its motions for summary judgment and insured responded by saying that the insurance company was relying on the wrong policy because it was very different from the approved policy he obtained from the Commissioner of Insurance. The court granted summary judgment in favor of insurance company without specifying whether it was on sanctioned or no-evidence principles. Insured again appealed, arguing the insurance company’s summary judgment motion was based on a fake policy and that was distinguished from an insignificant and unimportant detail. The insurance company responded, acknowledging there was a dispute about which policy was in force at the time of the collision, but argued it was entitled to deciding the final judgement of the summary.
The court held that although the structure of the language of the policies differed slightly, the language of the relevant portions of the two policies setting out the insurance company’s obligations is nearly identically worded. Both policies imposed the same prepossessions and obligations on the insurance company and did not create a fact issue whether the insurance company was authorized to settle the claim. The court continued its review of the remaining issues as though the insured’s version of the policy was correct. Insured argued, according to the policy language in their policy, that the insurance company must pay for damages for which an insured is liable and required it to determine if insured was legally responsible for those damages and prohibited it from paying if insured was not. The insurance company disagreed, arguing the “legally liable” language required it to pay damages after a court or other ruling body determined its insured was responsible for damages, but that its authority to settle claims was completely separate and allowed themselves to settle without the need for a legal determination of responsibility to avoid the expense of litigation when it decides that settling is appropriate. The court held that the insurance company’s clause is consistent with the plain meaning of the provisions requiring it to pay when an insured is legally liable for damages and empowering it with the ultimate decision to settle claims where appropriate. After reviewing applicable laws and finding the insurance company’s interpretation consistent, the court found the terms of its policy were not ambiguous and gave the insurance company the power to settle claims without its insured’s consent and without the need for litigation expenses. Martin-De-Nicolas v. AAA Texas County, No. 03-17-00054-CV.
The insured then sued the UIM’s insurance company for breach of contract of the Texas Insurance Code, failing to attempt in good faith to bring a prompt, fair, and equitable settlement; failing provide an explanation of the basis for the insurance company’s denial of a claim or settlement; failing within time to affirm or deny coverage of a claim; refusing to pay a claim without conducting an investigation; and requiring the insured to file a lawsuit to have the insurance company adhere to with its contractual duties. The insurance company filed exceptions, alleging insured’s claim of the “exhaustion doctrine” was not recognized in Texas and her claims were premature under the Supreme Court’s decision, 216 S.W.3d 809 (Tex. 2006) (the insurance company has no obligation to pay a UIM claim until insured obtains a proper judgment establishing the liability of the other driver). This fueled the insured to strike at the insurance company. After allowing the insured a chance to amend her petition, which she strongly refused, the court sustained the insurance company’s demurrer, denied insured’s motion to strike, and dismissed her claims with animosity.
The court of appeals declared that because the insured’s petition did not say she got a judgment against the other driver, that she failed to establish the existence of a duty or obligation on the insurance company and her claims were incomplete. The court upheld the insured’s exhaustion doctrine claim that she was legally entitled to her UIM policy benefits because her settlement drained all policy limits and was in direct conflict with Brainard’s holding that a settlement did not provoke the insurance company’s duty to pay. “Whatever the virtues of a contrary rule might be, as an intermediate court, we are bound to follow the rule laid down in Brainard unless and until the supreme court reconsiders or revises it.” Weber v. Progressive County, case number 05- 17-00163-CV.
Insured sued his insurance company with a personal injury attorney after his acquaintance was injured in a car accident while riding as a passenger in a stolen vehicle. The insurance company denied the claim based on an exclusion in its policy that “coverage will not apply to bodily injury sustained by you or a family member while using any vehicle, other than a covered auto, without the permission of the owner of said vehicle.” Insured filed enunciatory action asking the court to disregard the exclusion because his acquaintance, as passenger, was not “using” the vehicle. The insurance company sought and obtained summary judgment and insured appealed. The court of appeals held the insured’s acquaintance was “using” the vehicle as that term is understood within the context of vehicle insurance policies and that his “status as a passenger, alone, establishes use of the vehicle.” It relied on a three-part test out- lined in the case , Mid-Century Insurance Company of Texas versus Lindsey, 997 S.W.2d 153 (Tex. 1999): (1) the collision must have arisen out of the inherent nature of the automobile; (2) it must have arisen within the “territorial limits” of an automobile, and the actual use must not have terminated; and (3) the automobile must produce the injury and not “merely contribute” to it. Having found the insured’s friend fulfilled these three elements for use of the vehicle, the court came to a decision on the judgment. Salinas v. Progressive County, case number 07-16-00361. For any questions or concerns on your accident, please contact us anytime. We are personal injury lawyers in Corpus Christi here to provide you with assistance on understanding the laws surrounding any injury you have sustained. We look forward to your inquiry.
Seldon, S. E., Seldon, J. D., & Grebe, D. Annual Survey of Texas Law. Retrieved from http://www.jtexconsumerlaw.com/V22N2/V22N2_InsuranceLaw.pdf