Dallas Fort Worth Insurance Lawyer Blog

It is always smart to purchase uninsured motorist benefits coverage because of the number of people driving around with no insurance or insufficient insurance to cover a lot of losses that occur. This is particularly true in the Grand Prairie, Arlington, and Dallas - Fort Worth areas of Texas.
Uninsured or underinsured motorist coverage is required to be provided to drivers purchasing auto coverage in Texas. This requirement is found in the Texas Insurance Code, Section 1952.101.
The Court of Appeals, Texarkana, Texas, recently ruled in a case involving underinsured coverage benefits. The style of the case is Myrtis Williams v. State Farm Mutual Insurance Company. This case was decided on February 5, 2010.
The facts of this case are important to understanding the ruling of the court. Richard Conner was the only named insured in a State Farm Mutual Insurance Company (State Farm) policy. The policy covered a 2002 Cadillac Escalade. The address listed on the insurance policy for Conner was 1903 Circle Drive in Marshall, Texas. The listed drivers were Conner and his girlfriend Rewa Hubbard. The Escalade was titled to Hubbard.
Myrtis Williams, the claimant in this lawsuit, resided with Hubbard at 2505 West Francis Street in Marshall. Williams was involved in a wreck while driving her 1998 Lincoln Town Car. The other driver, who was at fault, did not have sufficient insurance to cover the loss to Williams. Williams then made a claim against Conner's, State Farm policy. State Farm denied the claim.
The court ruled in favor of State Farm. In doing so, the court analysed the policy and the facts of the case. In analysing the policy language, the court found that a "covered person", within the definitions of the policy, must fall within one or more of these categories: (1) the named insured shown in the declarations, (2) a family member of the named insured, or (3) any other person occupying the covered vehicle.
As to number (1); Williams was clearly not the named insured, Conner was. As to number (2); Williams was not a family member of the named insured, Conner. Her family relationship was mother to Hubbard. As to (3); Williams was not occupying the covered automobile. The covered automobile was Conner's Escalade. Williams was driving her own vehicle, the Lincoln Town Car.
There were a few legal reasons that attorneys for Williams probably relied on for finding a way to get coverage for Williams. Their efforts were laudable but a little too detailed to get into here. An experienced Insurance Law Attorney is helpful in seeing if a case has merit. No one wants to waste time, money, or effort in a losing cause. For that reason it is important to have these cases looked at and analysed.
It is noteworthy that the policy at issue here was one in the form prescribed and approved of by the Texas Department of Insurance.

Punative damages and "exemplary" damages are essentially the same thing in Texas. The way exemplary damages works in Texas is the same regardless of whether you live in Arlington, Grand Prairie, Fort Worth, Dallas, or Weatherford.
The Texas Court of Appeals in Houston, Texas, recently dealt with the issue of how exemplary damages are handled when the claim made is a claim against a person's own insurance carrier for uninsured motorist benefits. This case was decided on February 4, 2010. The style of the case is, Sandra Gervais Laine, v. Farmers Insurance Exchange.
In this case Laine's mother was killed in an auto accident. The other driver was at fault and was intoxicated. Laine made a claim against Farmers Insurance Exchange for benefits under her uninsured motorist benefits portion of the auto policy. Farmers paid the uninsured benefits limit of $250,000. She then made a claim against her umbrella policy which provided the same benefits as the auto policy except for a higher amount. The limit under the umbrella policy was $1,000,000.
Farmers denied the claim under the umbrella policy and Laine sued Farmers. A jury found the uninsured driver at fault and assessed actual damages of $175,000. The jury then found exemplary damages in the amount of $1,500,000 as punishment against the intoxicated driver. The trial Judge overruled the jury's verdict against Farmers on the exemplary damages. The appeals court affirmed the Judge's ruling.
The Judge's looked at the policy language and public policy considerations in making their decision. The policy defined damages as "the total of damages that the insured must pay (legally or by agreement with our written consent) because of bodily injury, personal injury or property damage caused by an occurrence covered by this policy..." The policy goes on to talk about "bodily injury". The policy is silent on the issue of exemplary damages. The court held that exemplary damages are amounts in excess of actual damages. And it did not matter that the policy did not contain an exclusion for "damages which are punitive or exemplary."
As for public policy considerations, the Texas Supreme Court has rejected as against public policy, coverage under uninsured motorist policies, when the insured seeks to recover from his own insurer exemplary damages assessed against a responsible third party wrongdoer. Further, that both public policy and the language contained in the Insurance Code and the Motor Vehicle Safety Responsibility Act, limit recovery under an uninsured motorist policy to compensatory damages. Here, the court cited the Texas Insurance Code, Section 1952.001 and Texas Transportation Code, Sections 601.001 - 601.054, and stated that this policy does not support rendering damages against an insurance company since neither deterrence of wrongful conduct nor punishment ... of the wrongdoer is achieved by imposing exemplary damages upon the insurance company.
To further affirm their position, the court looked to Chapter 41 of the Civil Practice and Remedies Code as further indication that the punishment imposed through exemplary damages is to be directed at the wrongdoer. And, the Texas legislature ensured that persons injured by uninsured motorists be compensated for their actual injuries, when they enacted Section 1952.101, Texas Insurance Code.

Here is a situaton where a Dallas resident had a wreck in Mesquite, but it could have been Fort Worth, Arlington, Grand Prairie, or out in Weatherford. The injured persons had two insurance policies with the same insurance company.
This happened in a 1984 case, The Travelers Indemnity Company of Rhode Island, v. Lenny and Terri Lucas. Mr. Lucas was accompanied by his wife, Ms. Lucas, in an ambulance. A drunk driver ran head-on into the ambulance causing injuries to the Lucas'. They had two separate insurance policies with Travelers Indemnity, for Personal Injury Protection benefits and underinsured motorists benefits. Travelers paid the full amount under one policy to each of the Lucas' but refused to pay under the second policy. The damages to the Lucas' exceeded the limit of both the policies combined.
The ambulance also had underinsured benefits with a policy through Aetna. Travelers tried to limit what it had to pay by citing an "Other Insurance" clause within the Travelers policy.
The court ruled that an insurance company may not reduce its underinsured liability to an amount less than the policy limit by crediting itself an amount paid under another policy. The same ruling was made regarding payments made for Personal Injury Protection benefits.
A case decided in 2007, was essentially the same. The 2007 case was Kelley v. Progressive County Mutual Insurance Company.
Here, Kelley was injured by a motorist while riding her horse and her claim exceeded $1,000,000. She received the policy limit of $100,000 from the at fault driver and then received the limit of $500,000 under a policy issued to her by Progressive. However, on a policy issued to her father by Progressive, which also named her, Progressive refused to pay. Progressive asserted a policy provision that prohibited "stacking" the policies and argued that her recovery was limited to just one of the polices.
The court noted that the policies were separate policies, with separate policy numbers and separate vehicles listed. Just because Progressive issued both policies to members of the same family did not allow Progressive to prevent a "stacking" of these policies.
There are situations where an insurance company may not have to pay where there is duplicate coverage. When there is more than one policy that may cover a claim it is important to seek the advice of an Experienced Insurance Law Attorney to insure your rights are properly protected.

Residents of Dallas, Fort Worth, Arlington, Grand Praire, Weatherford, or any other town in Texas should be interested in a question posed by an attorney the other day on a web-site, to other attorneys who sub-scribed to the site. It was a question dealing with uninsured and underinsured (UM) automobile coverage.
In the situation, a potential client had come into the attorneys office. The potential new client had been involved in an accident where the other person did not have enough insurance coverage to fully cover the damages this potential new client had suffered. Sounds simple so far. Here was the problem: More than two years had past since the accident had occurred. The question posed was: Can I recover more money from the UM coverage on the injured persons automobile policy.
This was the issue in the case Raul C. Franco et ux., v. Allstate Insurance Company. In the Franco case, Franco sought to recover damages due to the death of their daughter in an automobile accident. The lawsuit had been filed approximately three years after the date of the accident. The applicable statute of limitations for an injury claim was two years.
In the Franco case, the lawsuit had been filed against Allstate Insurance Company because of the accident but the basis for the claim against Allstate was the policy of insurance issued by Allstate. A policy of insurance is a contract between the insurance company and the insured. The statute of limitations on a contract claim is four years.
Allstate argued, among other things, that because the two year statute of limitations had expired on the accident, that the claim against Allstate that originated out of that wreck, was also barred by the two year statute of limitations. The Texas Supreme Court disagreed with Allstate and ruled in favor of the Franco family members stating that the claim against Allstate was a contract claim and thus the four year statute of limitations applied.
What is to be learned here is two-fold. First, a claim for UM benefits under an insureds' own insurance policy is four years, not two. Second, not discussed in the case but important is the extent of the recovery.
If the other driver had insurance, for instance a liability policy of $20,000, and the injured person had underinsured coverage of $20,000, and a claim whose value was estimated to be $30,000, what would have happened? The answer would be, that because the two year statute had expired for making a claim against the other guys policy and the claim was now only against the injured persons' underinsured policy, the total recovery would be limited to $10,000. Why? Because the underinsured policy would get a credit for the $20,000 that would have been recovered from the other drivers liability policy.
This can be confusing. It illustrates though, why it is important to get an Experienced Insurance Law Attorney involved early in a case in order to fully compensate a person who is trying to make claims against an insurance company.

Here is a case that was originally filed in a State District Court in Dallas, Texas. The case was removed to Federal Court and promptly dismissed.
The style of the case is "Kenneth McQuinne v. American Home Assurance Company". The only important issue in the case was whether or not a self insured vehicle was "uninsured" for purposes of the American Home Assurance Company policy argued about in this case.
The facts in this case are that McQuinne was involved in a wreck with a person named Sapkota. Sapkota was driving a vehicle owned by Enterprise Leasing. McQuinne reached a settlement with Sapkota's insurance company for the policy limit of $50,000. McQuinne alleged that his damages exceeded that amount and consequently filed a claim with American seeking additional benefits under the policy American had issued on his employer, Turfgrass.
The American policy excluded uninsured motorist coverage for vehicles that were self-insured. The Enterprise vehicle was self-insured. McQuinne argued that since the Enterprise was self-insured that it was uninsured and thus American should be made to pay benefits under the uninsured portion of the policy.
American argued that the Enterprise was a self-insurer under the Texas Motor Vehicle Safety Responsibility Act. As such the car is expressly excluded from coverage under the policy.
The court got into an analysis of contracts, insurance policies, and the words used in the context of both. They decided that as a matter of law that American won the case.
This case points out the creative efforts of the attorney for McQuinne to try and obtain relief for his client. It also restated contract and insurance policy language that the courts are not going to change.

One of the most significant Texas cases discussing Texas Insurance Law as it relates to underinsured auto coverage was decided in 2006. This Texas Supreme Court case was Lilith Brainard, et al., v. Trinity Universal Insurance Company.

This case involved a head-on collision with a rig owned by a company called Premier. The ultimate decision in the case would have been the same regardless whether the accident occured in Dallas, Fort Worth, Arlington, Weatherford or anywhere else in Texas. Brainard was killed in the wreck. He had an underinsured policy with Trinity. Brainards' widow and children made a claim for benefits from Trinity and also filed a lawsuit against Premier.

Trinity paid the $5,000 Personal Injury Protection benefits under the policy immediately but nothing on the underinsured portion of the policy. Brainard settled the claim against Premier for the policy limits of $1,000,000. Brainard then requested that Trinity pay its underinsured policy limts of $1,000,000. Trinity refused but did offer $50,000. Brainard proceeded to trial and got a judgment wherein the jury awarded damages of $1,010,000 in actual damages.

Since Trinity had not paid the money under the insurance contract, Brainard demanded that Trinity pay the remaining $5,000 in actual damages (they got a credit for the $5,000 of PIP previously paid and the $1,000,000 settlement from Premier), plus $100,000 in attorneys fees and interest on the entire $1,010,000.

The significance of this case is that the Supreme Court ruled that Trinity had not broken its insurance contract with Brainard and thus there was not a claim for attorneys fees. In explaining this the Court said that there was no obligation under the insurance contract to pay underinsured benefits until Brainard had won in Court. And that as long as Trinity paid the amounts awarded in court within thirty days of the judgment, there was not a breach of contract.

This case essentially took away, Breach of Contract claims for situations wherein an insured makes a claim against their insurance company for benefits and the benefits are denied. A lawsuit can be filed and the monies eventually recovered in the lawsuit but as long as the insurance company quickly pays, the amount they have to pay is limited.

There are other lessons to be learned from this case that are significant for an attorney when advising a client how to proceed against their insurance company. Only an experienced Insurance Law Attorney is going to understand these distinctions and be able to properly advise a client.