When Your Own Insurance Finds You At Fault

Farmers Branch insurance lawyers will have a client walk in and say that their own insurance company has found them at fault for an accident and paid the other party. What can be done? A Dallas Court of Appeals case gives some insight. The style of the case is, Van K. Martin v. State Farm Mutual Automobile Insurance Company.
This is an appeal from a declaratory judgment action and an appeal from an adverse finding in a summary judgment.
Martin’s son was involved in an auto accident with another State Farm insured, Jeffery Lonsdale. No one was injured in the accident, but Lonsdale filed a claim for property damage, which was submitted to State Farm under Part A of Martin’s liability policy. Martin filed a claim for property damage to his vehicle under Part D of the policy. State Farm settled Lonsdale’s claim and provided coverage for the property damage to Martin’s vehicle. Martin alleges that State Farm unreasonably concluded his son was primarily responsible for the accident without interviewing Martin’s son or other witnesses in the car. Martin alleges he paid the deductible to have his vehicle repaired and paid “incremental semi-annual premiums” related to the accident.
Martin alleges State Farm breached the contract by acting unreasonably “in its factual approach and analysis” determining the responsible party.
Martin’s pleading is not entirely clear, but it appears he is using the breach of contract and declaratory judgment claims as vehicles for asserting a bad faith insurance practice claim.
In his response to the motion for summary judgment, Martin argues State Farm took action to “limit plaintiff’s contract rights under Part A, Paragraph A, and Part D, Paragraph A of the contract.” Martin contends State Farm found his son responsible for the accident and “withheld reimbursement for property damage to the extent of the policy deductible.”
Part A of the policy provides liability coverage. It states in part:
A. We will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident. . . . We will settle or defend, as we consider appropriate, any claim or suit asking for these damages. In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted.
Part D of the policy provides coverage for damage to the insured’s vehicle. It states in A. We will pay for direct and accidental loss to your covered auto, including its equipment, less any applicable deductible shown in the Declarations. However, we will pay for loss caused by collision only if the Declarations indicate that Collision Coverage (Coverage D2) is provided.
Lonsdale filed a claim for property damage to his vehicle against Martin. This claim was within the scope of the liability coverage provided by Part A of Martin’s policy. The record indicates State Farm settled Lonsdale’s claim within the policy limits and without any liability to Martin. The policy expressly allows State Farm to “settle or defend, as we consider appropriate, any claim or suit asking for these damages.”
Martin presented evidence about how the accident occurred and of his communications with State Farm. Martin’s communications with State Farm demonstrate his disagreement with State Farm’s decision, but fail to show how State Farm breached the express terms of the policy. There is simply no evidence that State Farm did not consider the settlement with Lonsdale appropriate. The settlement of Lonsdale’s claim was not a breach of contract.
Martin also filed a claim with State Farm for property damage to his vehicle. The record indicates State Farm paid Martin’s claim under Part D of the policy. The policy specifically provides, “We will pay for direct and accidental loss to your covered auto, including its equipment, less any applicable deductible shown in the Declarations.” Requiring Martin to pay the deductible required by the policy was not a breach of contract.
The Court concluded State Farm established it did not breach the contract and Martin failed to raise a genuine issue of material fact as to that element of his breach of contract claim. Thus, the trial court did not err.