Stolen Vehicle

Dallas insurance lawyers will have potential clients come and ask questions dealing with their stolen vehicle and how the insurance company is handling the claim. The Dallas Court of Appeals issued a 2008, opinion that is worth knowing about. The case is styled Ysasaga v. Nationwide. Here is the relevant information from that case.
On March 2, 2002, Ysasaga reported that his 2001 Chevrolet Corvette had been stolen in Dallas and filed an insurance claim with Nationwide. Ysasaga subsequently initiated the Insurance lawsuit against Nationwide. In the Insurance Case, Ysasaga sought the recovery of damages arising out of the theft of the Corvette, including policy benefits and extra-contractual damages. Ysasaga claimed the Corvette was valued at $49,200. On March 4, 2004, the parties entered into a settlement agreement. Pursuant to the settlement, Ysasaga signed a release of all claims ” which arise out of the facts alleged and situation described in [the Insurance Case].” In consideration of the release, Nationwide paid Ysasaga $110,000. From these settlement proceeds, $34,281.09 was paid to Ysasaga and First State Bank for the release of the lien on the vehicle and $75,718.91 was paid to Ysasaga and his attorneys. As provided in the release, the Insurance Case was dismissed. Despite the payment to Ysasaga and the release of the lien, title to the vehicle was never formally transferred to Nationwide.
In June 2005, the vehicle was recovered in Mexico. Nationwide informed Ysasaga of the vehicle’s recovery and requested Ysasaga’s endorsement of the certificate of title. In response, on August 9, 2005, Ysasaga initiated a Conversion Case and asserted Nationwide had converted the vehicle.
In its motion for summary judgment, Nationwide argued that it acquired Ysasaga’s right to possession by paying Ysasaga’s theft claim and compensating him for the loss of the vehicle. The right to possession was premised on the doctrines of contractual and equitable subrogation. Nationwide further argued that because it is the rightful owner of the vehicle, Ysasaga’s conversion claim fails as a matter of law. The summary judgment evidence adduced by Nationwide included a copy of the insurance policy, the release, and an affidavit on attorney’s fees. Nationwide’s evidence also included a copy of Ysasaga’s petition in the Insurance Case which declared the vehicle was valued at $49,200.
Ysasaga contends the trial court erred by giving effect to the underlying insurance policy because the release extinguished all subrogation rights under the policy. Neither party claims the release is ambiguous.
The effect of the insurance policy is significant because it is through the policy that Nationwide obtained its ownership rights by application of the principle of subrogation.
Here, the insurance policy provides a right of subrogation. The policy states:
If we make a payment under this policy and the person to or for whom payment was made has a right to recover damages from another, we shall be subrogated to that right …
If we make a payment under this policy and the person to or for whom payment is made recovers damages from another, that person shall:
1. Hold in trust for us the proceeds of the recovery; and 2. Reimburse us to the extent of our payment.

The policy further provides that Nationwide’s limit of liability for theft loss will be the lesser of the:
1. Actual cash value of the stolen or damaged property;
2. Amount necessary to repair or replace the property with other of like kind or quality; or 3. Amount stated in the declaration of the policy.

The policy also states that Nationwide has the option to either return the property to the insured or keep all or part of the property.
Nationwide’s summary judgment evidence established that the value of the vehicle was $49,200 and Nationwide paid Ysasaga $110,000 in exchange for which Ysasaga fully released his claim for benefits under the policy. Based on the unambiguous language of the policy, this court concluded Nationwide acquired Ysasaga’s ownership rights in the vehicle when this payment was made.
A plaintiff in a conversion case must show ownership, possession or entitlement to possession of personal property. Once Nationwide established it was entitled to ownership of the vehicle, Ysasaga could not recover on his conversion claim as a matter of law.
A release extinguishes a claim or cause of action and bars recovery on the released matter. The pertinent language of the release states Ysasaga forever discharges and releases Nationwide:
from any and all rights, claims, demands, actions or causes of action based upon breach of contract, breach of express warranty, bad faith, fraud … any cause of action based upon any tort … which arises out of the facts alleged and situation described in [the Insurance Case].
The judgment of the trial court in Nationwide’s favor was affirmed.