Coverage Or No Coverage

Dallas insurance attorneys will tell you that in order to determine coverage or no coverage under an insurance policy that the entire fact situation needs to be examined. In a 2014, Fort Worth Court of Appeals opinion, in a case styled, City of Carrollton v. Fred Loya Insurance Company, reversed a trial court that said there was no issue to be decided. Here is the relevant information from that case.
This case revolves around whether an insured, Danelle Butts, validly added her daughter, Donna, back to her insurance policy so that the daughter’s car accident with a pedestrian was covered by the policy.
Danelle had an automobile insurance policy through Fred Loya Insurance. On August 3, 2007, Danelle amended her policy to exclude her daughter Donna from coverage under the policy because Donna moved out of the family home.
Less than a month later, Danelle requested that her daughter be added back onto the policy because she was moving back into the home. The auto policy change request form was filled out by a Loya employee who wrote at the bottom of the form, “Added Donna M. Butts as per insured’s request.” Danelle dated her signature at the bottom of the form “8/30/07.” At the top of the form, in the blank for “change effective date,” the Loya employee wrote the date of August 31 but left blank the space for the time. The form was faxed to Loya from BenefitMall.com at 11:56 a.m. on August 31; Danelle worked for Benefit Mall at the time. Loya faxed a document entitled “Endorsements” at 12:01 on August 31 to Benefit Mall. It is not clear from the fax stamp whether 12:01 was in the early morning hours or just after noon. Linda Davila, a Loya employee, testified in deposition that she assumed that the absence of an “a.m.” or “p.m.” would indicate that the fax was transmitted after noon. She based that assumption on military time but conceded that she did not base that assumption on her knowledge of Loya fax machines.
On August 31, 2007, at approximately 8:35 a.m., Donna, driving Danelle’s vehicle, struck City of Carrollton’s employee Diego Salinas.
Danelle’s premium payment was processed by Loya after the accident.
Loya concedes that the endorsement adding Donna back to the policy was issued August 31 but states that it nevertheless denied coverage after discovering that Danelle had attempted to add Donna back to the policy after the accident occurred.
It also asserted in a motion for summary judgement that the change adding Donna to the policy did not become effective until several hours after the accident, that she was therefore not covered under the policy at the time of the accident, and that Loya consequently did not breach its contract by refusing coverage for the accident. If the breach of contract claim failed, Loya asserted, it had no liability for extra-contractual claims under the DTPA or insurance code.
This Court held that there are fact issues as to whether–by virtue of an agreement between Loya and Danelle via the auto policy change request form– Loya’s obligation to issue the endorsement arose before the accident and when Loya issued the endorsement.
There is a lengthy discussion of the facts and sequence of events in the opinion and is worth reading for an attorney handling these types of cases.