Articles Posted in Uninsured/Underinsured Coverage

Here is a 2020, case wherein the Court allowed a petition to be amended and the result being that diversity jurisdiction was defeated.  The opinion is from the Southern District of Texas, Houston Division.  It is styled, Robert Jones v. State Farm Mutual Automobile Insurance Co.

State Farm provides uninsured motorist (UIM) coverage to Jones.  Tho Thi Le struck Jones.  Jones sued State Farm in State Court seeking UIM coverage on September 26, 2019.  Le is uninsured.  State Farm removed the case to this Federal Court on October 31 after filing its answer on the 25th.  Le is a resident of Texas and State Farm is not.

Jones sought permission to amend his pleadings on November 8, seeking to add Le as a defendant.

Uninsured motorist protection (UIM) historically has been its on little niche of the law that was not purely tort law or purely contract law.

Creative attorneys have recently been having success seeking UIM claims by way of a Declaratory Judgment Action.  The most recent case is from the Corpus Christi Court of Appeals and is styled, Allstate Fire and Casualty Insurance Company and Allstate Insurance Company v. Jesus Inclan.

Inclan sued Reynaldo Sanchez, the uninsured driver, and Allstate for injuries Inclan sustained in a car wreck with Sanchez.  There were offers made and eventually Inclan sought declaratory relief and attorney fees under the Uniform Declaratory Judgments Act (UDJA) pursuant to the Texas Civil Practices & Remedies Code, Section 37.001 – .011.

Uninsured/Undersinsured (UIM) coverage has its own rules.  It is sometimes hard to understand the distinction between UIM coverage claims and other tort claims and how this works with the Texas Insurance Code.  However, this discussed in a January 2020, opinion from the United States Northern District Dallas Division.  The opinion is styled, Detavia Wilson v. State Farm Mutual Automobile Insurance Company, Robert Nash, and Yulonda Jones.

Detavia was injured in an automobile accident wherein she incurred past medical bills of $21,259.00 and future medical expenses of $231,500.00.  Detavia settled with the 3rd party insurance company for policy limits, a settlement which State Farm approved.  Detavia then claimed against her UIM coverage with State Farm.  The adjuster asked for additional medical records and then Detavia sued State Farm and the adjuster for violating Texas Insurance Code, Sections 541.060(a)(2), (a)(3), and (a)(2).

State Farm claims that Detavia lawsuit for Insurance Code violations is not yet ripe because Detavia has not obtained the proper predicate adjudication of the tortfeasor’s liability to her.  Only after doing so can she present a ripe UIM claim to State Farm.  This Court agreed with State Farm.

Insurance lawyers know to look at the Texas Insurance Code, starting at Section 1952.101, to see the requirement that insurance companies are required by the Texas Department of Insurance and by statute to provide underinsured (UIM) coverage in their automobile polices.

One of the steps an insurance lawyer is suppose to make when trying to collect UIM benefits is to get written permission from the UIM insurance carrier to settle with the responsible third party before actually settling the case with the responsible third party.  This is required so as to not prejudice the right of the insurance carrier to subrogate against the third party in the appropriate situation.

This issue is discussed in a 2019, opinion from the Dallas Court of Appeals.  It is styled, Curtis Davis v. State Farm Lloyds, Inc.

Uninsured motorist (UM) claims are in a category unto themselves.  This is illustrated in a 2019, opinion styled, Ali Duhaly v. The Cincinnati Insurance Company.  The opinion is from the Southern District of Texas, Houston Division.

Duhaly sued Cincinnati alleging breach of contract, among various other causes of action.  Duhaly worked for an employer who was insured by Cincinnati for (UM) coverage.  Duhaly was injured when a passenger in a vehicle owned by the employer.  The policy states that Cincinnati will “pay all sums the insured is legally entitled to recover as compensatory damages from the owner or operator of … an uninsured motor vehicle” to which ” no liability bond or policy applies at the time of the accident” or an underinsured motor vehicle to which the insurance coverage is insufficient to cover the damages.

Duhaly sued Cincinnati in State Court and Cincinnati timely removed the case to Federal Court.  Cincinnati filed a motion for summary judgment as to Duhaly’s breach of contract claim.

Texas insurance lawyers will find this interesting.

A person finds early on when dealing with an insurance company that simply making complaints and contacting the Texas Department of Insurance is a waste of time and effort.

If you are an attorney representing someone injured in an automobile accident and the person who cause the wreck is uninsured and the person injured has uninsured motorist (UM) coverage with their auto insurance company and the company is refusing to compensate their customer, here is a sample opening statement when trying this case to a jury:

Insurance lawyers will often run across the situation at issue in the 2018, Dallas Court of Appeals opinion, George Bryant v. Progressive County Mutual Insurance Company and Kristen Winkler.

This is a uninsured motorist (UM) case wherein Bryant sued Progressive and the adjuster, Winkler, for the harm caused by the UM driver and numerous insurance code violations.  The trial court severed the auto wreck from the bad faith insurance claims.  In an UM case, Brant first had to prevail at trial, which he did.  Bryant then continued his claims for insurance code violations.  The trial court granted a motion for summary judgment in favor of Progressive and this appeal followed.

Bryant alleged numerous appeal points but the one discussed here is the issue regarding the Texas Prompt Payment of Claims Act (PPCA).

The Fort Worth Court of Appeals issued an opinion on November 15, 2018, that is worthy reading for lawyers handling uninsured / underinsured motorist coverage (UIM).  The case is styled, William Blevins v. State Farm Mutual Automobile Insurance Company.

This case is an appeal from a trial by Blevins against State Farm wherein the jury ruled in favor of State Farm.  The opinion is lengthy and the majority of it deals with whether the decision by the jury was justified in light of the evidence.  What is dealt with here is the ruling by the court to not allow in evidence regarding the UIM coverage.

Blevins argued the trial Judge erred by declining to allow testimony about Blevin’s UIM coverage.

Sometimes figuring out what is an “accident” for uninsured motorist (UM) coverage is tricky.

In the 1999, Texas Supreme Court opinion styled, Mid-Century Insurance Company of Texas v. Lindsey, found coverage for the plaintiff, who was seated in the driver’s seat of a parked vehicle.  In a truck next to Linsey’s parked vehicle, a child tried to enter the cab by climbing through the back window.  In doing so, the child accidentally contacted a loaded shotgun, causing it to discharge and strike Lindsey in the head.  Lindsey’s carrier denied coverage on the grounds the injury did not “arise out of the use” of the vehicle and because the event was not an “accident.”  The court opined that an accident need not be an auto accident or collision; rather, it looked to the child’s intent and the reasonably foreseeable effect of his conduct to determine whether an accident had occurred.  Because the child did not intend to discharge the gun or injure Lindsey, and because neither result was reasonably foreseeable, the court determined Lindsey’s injury was caused by an accident.  Further, the court determined that Lindsey’s injury “arose out of the use” of the vehicle due to the fact that the accident was caused by the child’s attempt to enter the vehicle.  In reaching its decision, the court relied more on the fact that the child’s acts were unexpected and unintentional than on the role of the vehicle in the accident.

In a 2000, El Paso Court of Appeals opinion styled, State & County Mutual Fire Insurance Co. v. Trinity Universal Insurance Cos., a woman had been hit by a car as she tried to escape from the insured’s van after the driver had attempted to sexually assault her.  The court identified the following three-prong test under Lindsey for construing the “use” requirement of UM coverage: 1) did the accident arise out of the inherent nature of the automobile; 2) did the accident arise within the natural territorial limits of the automobile; and 3) did the automobile itself produce the injury (rather than merely contributing to the cause of the condition that produced the injury).  Applying these factors, the court found that the accident arose out of the use of the vehicle as a vehicle because “but for the vehicle and its position on the highway,” the woman would dnot have died from being struck by traffic.  Furthermore, she died on a roadway, which was “within the natural territory of the vehicle.”  But under the third factor, the use of the van was merely incidental in producing the victim;s death; it did not itself produce the injury.  The court noted that the victim was not struck by or pushed from the van; she did not fall from it; ans she was not injured by it.  Therefore, the Lindsey test was not satisfied.

A Parker County or Palo Pinto County insurance lawyer handling uninsured motorist (UM) claims need to understand how the terms “accidents” and “arise out of use” are looked at by Texas courts.

Texas decisions suggest that if an incident is intentional or criminal in nature, there may not be an “accident” for UM purposes.  If the incident is unexpected or unintended, Texas courts are more willing to find coverage.  The somewhat varying interpretations of “accident” and “use” require close scrutiny of the facts of each claim to determine if UM coverage is triggered.

Here is an example from the Texas Supreme Court in 1999.  The opinion is styled, State Farm Mutual Automobile Insurance Co. v. Whitehead.  In this case, the court ruled a drive-by shooting does not trigger UM coverage.  A passenger in a truck was injured when the truck in which she was riding hit a bridge stanchion after the driver lost control of the vehicle.  The driver lost control after being shot by the passenger of another vehicle.  The court determined the injury was purely incidental to the “use” of the vehicle because the shooting resulted from an independent and intentional act.  The fact that the automobile is the situs of the accident is not sufficient to establish the necessary nexus between the use of the vehicle and the accident.  As such, the court held the policy did not provide overage for the passenger’s injury.

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