UNINSURED MOTORIST, PERSONAL INJURY PROTECTION, AND STOWERS DEMANDS—THREE WAYS TO MESS UP A CARRIER’S DAY
Thursday, February 19, 2009
Copyright 2009 Lisa A. Songy
Originally presented at the South Texas Insurance Law Seminar
Though the courts have been very active in the last year with regard to commercial liability policies, little case law has developed which impacts the majority of the claims made on a yearly basis. However, there have been a number of developments on the legislative front.
LEGISLATIVE DEVELOPMENTS EFFECTING UM AND PIP COVERAGE
The 2007 legislature put into place a staggered increase in the mandatory limits for liability insurance and in effect for Uninsured limits as well. All policies issued or renewed after April 1, 2008 now have mandatory minimum limits of $25,000 per person and $50,000 per occurrence. Thus, if the insured does not reject UM in writing, their minimum limits are also 25/50. On January 1, 2011, those limits will increase to 30/60.
Also, in an attempt to help crack down on the numbers of Uninsured motorists on Texas roadways, the legislature authorized and the state has begun to implement the TexasSure program. This database matches the records of registered vehicles with personal auto insurance policy information submitted by Texas insurance companies. The database became available to law enforcement statewide in October 2008. This database, in conjunction with the enactment locally by many cities of mandatory towing for uninsured motorists, is meant to crackdown on the estimated four million uninsured motorists in the state. The maximum fine for driving without insurance is $350. Repeat offenders are subject to a two-year driver’s license suspension.
Finally, the legislative change which permits carriers to attempt to subrogate their payments of Personal Injury Protection benefits has been in effect for just over a year. Carriers can seek to recover those payments from the negligent driver, but to date no statistics exist to determine if carriers are in fact pursuing that right or the success of recovery.
CASE LAW
Two significant cases involving UM have come out of the Texas Supreme Court in the past year. In Nationwide Insurance Co. v. Elchehimi, 249 S.W.3d 430 (Tex. 2008), the supreme court addressed the issue of what constitutes “contact” with an “uninsured motor vehicle.” On January 4, 2002, Mr. Elchehimi’s station wagon collided with a drive axle and attached tandem wheels that had separated from an eighteen-wheel semi-trailer truck. The unidentified truck, which was being driven in the opposite direction on a divided highway, did not stop. Momentum carried the axle-wheel assembly across the dividing median, where it struck the Elchehimi vehicle, injured the occupants, and damaged the vehicle.
The Elchehimis had a standard personal auto policy with Nationwide. Nationwide denied the Elchehimis’ claims for Uninsured motorists benefits because the impact between the Elchehimi vehicle and the axle-wheel assembly was not “actual physical contact” with an unknown “motor vehicle,” as required by the policy.
The Elchehimis sued for breach of contract and breach of the duties of good faith and fair dealing. Nationwide moved for summary judgment on the grounds that there was no actual physical contact with the unknown vehicle. The trial court granted summary judgment. The court of appeals reversed, concluding that a fact issue existed as to whether actual physical contact occurred.
On petition for review to the Texas Supreme Court, the parties agreed that Texas Insurance Code section 1952.104(3) governed the dispute. That provision reads as follows:
For the insured to recover under the uninsured motorist coverage if the owner or operator of any motor vehicle that causes bodily injury or property damage to the insured is unknown, actual physical contact must have occurred between the motor vehicle owned or operated by the unknown person and the person or property of the insured.
Nationwide, 249 S.W.3d at 432–33.
The court noted that in order for the Elchehimis to survive summary judgment, they must raise a fact issue that the vehicle’s collision with the axle-wheel assembly qualified as “actual physical contact” with a “motor vehicle” or a legally recognized substitute for such contact. Id. at 433. The court’s focus was on the definition of “motor vehicle” as that term was not defined in the policy or the statute such that the question actually presented was “Is physical contact with a part of an unknown vehicle enough to be considered actual physical contact with a motor vehicle.” Ibid. The supreme court said no. The court refused to adopt the “integral part test” set out by the court of appeals, noting that “such a test would be practicably unmanageable, requiring a case-by-case analysis to determine if a part was substantial enough to serve as a proxy for a motor vehicle.” Id. at 434.
The second case involved a Business Auto policy but addressed language that is similar to the language found in most personal auto policies. In United States Fidelity and Guaranty Co. v. Goudeau, No. 06-0987, ___ S.W.3d ___, 2008 WL 5266378, at *1 (Tex. Dec. 19, 2008), the Texas Supreme Court was asked to decide whether or not a good samaritan who was injured while helping a stranded motorist was “occupying” a covered auto for the purposes of Uninsured Motorist coverage.
Godeau worked for Advantage BMW in Houston and was driving one of its cars in the course and scope of his employment. Godeau stopped on the right shoulder of the Sam Houston Tollway to help another motorist who had hit the freeway’s retaining wall. After getting out of his car and walking around to the front toward the retaining wall, a car driven by Alex Rodriguez slammed into both parked cars and pinned Goudeau against the retaining wall crushing his pelvis.
Advantage BMW had two policies with USF&G, a worker’s compensation policy and a business auto policy with uninsured/ underinsured coverage of $1,000,000. USF&G paid over $100,000 in worker’s compensation benefits but denied benefits under the underinsured motorist policy.
Goudeau sued Rodriguez and recovered Rodriguez’s $20,000 policy limits in settlement. Goudeau then amended his petition to sue USF&G for breach of the underinsured motorist policy. USF&G answered using one law firm and, a few days later, intervened using a different law firm to assert its $100,000 statutory subrogation claim against the money Goudeau recovered in the lawsuit.
The trial court granted summary judgment against Godeau on his underinsured claim. The court of appeals reversed and remanded finding a fact issue as to whether Godeau was “occupying” his vehicle.
The parties agreed that Godeau was entitled to coverage only if he was “occupying” the vehicle as that term was defined by the policy. The standard form policy defined “occupying” as “in, upon, getting in, on, out or off.” Godeau contended that he was “occupying” the car by being “upon” it when he was injured.
In holding that Godeau was not “occupying” the vehicle, the Texas Supreme Court returned to very basic canons of construction. Under the traditional doctrine of noscitur a sociis (“a word is known by the company it keeps”), each of the words used must be construed in context. Applying that principle to the facts before it, the supreme court held that a driver who had exited the car, closed the door, walked around the front and then has the vehicle smashed into him, can not be said to be “occupying” the vehicle at the time of the collision even if afterwards he ends up partly “upon” it. Id. at *2.
The court rejected the multitude of tests proffered by other states and instead held, “Under Texas law, we are required to construe the insurance policies according to their plain language, using ‘the ordinary, everyday meaning of the words to the general public.’” Id.
As an alternative argument, Godeau argued that the carrier already admitted Godeau was covered by the UM coverage in response to Requests for Admissions. However, that admission was by the intervenor worker’s compensation carrier, USF&G, not the UM carrier. The court rejected this argument noting that, as a matter of law, the worker’s compensation carrier would have been entitled to recovery to satisfy its statutory lien, and thus any admission by the worker’s compensation carrier was not binding on the UM carrier. Id. at *3–4.
The opinion is very simple in its reasoning and seems to make logical sense, despite its harsh consequences. While Mr. Godeau was a very sympathetic plaintiff, his injuries did not go entirely uncompensated, which may have been a factor in the court’s decision making process.
CASES PENDING BEFORE THE SUPREME COURT
Tanner v. Nationwide Mutual Fire Insurance Co., 232 S.W.3d 330 (Tex. App.—Eastland 2007), pet. granted, No. 07-0760 (Tex. Mar. 28, 2008), has generated quite a bit of media attention due to the facts of the case. However, its impact on Texas law may be of little importance, as it deals with the interpretation of a personal auto policy written in Ohio for an Ohio insured and which addresses language not found in the Texas personal auto policies. The coverage case arose out of a high speed police chase that went on for quite some time on highways, as well as residential streets, with Gibbons, the driver, running stop signs, stop lights, disregarding the speed limit, and at times driving on the wrong side of the road. The chase eventually ended in a field after the police shot out three tires and forcibly pulled Gibbons from the vehicle to arrest him. During the course of the chase, Gibbons collided with the Tanner vehicle when he ran a stop sign at a high rate of speed. Gibbons did not stop at the scene but rather continued to try and evade the police.
Nationwide Mutual Fire Insurance insured Gibbons under a policy issued in Ohio. The policy contained the following exclusion for liability coverage: “Property damage or bodily injury caused intentionally by or at the direction of the insured, including willful acts the result of which the insured knows or ought to know will follow from the insured’s conduct.” The “intentional acts” exclusion is broader than the exclusion appearing in the typical Texas auto policy.
Neither party contended that Ohio law applied to the interpretation of the policy. However, the Eastland Court of Appeals looked at Ohio law, which has interpreted the same policy language in a case involving similar facts. The court then turned to Texas law, which had interpreted other intentional act exclusions:
Texas follows the inferred intent rule, which considers a result (including injury to another) to be intentional whenever it is the natural and probable consequence of an intentional act. State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 378 (Tex. 1993). In other words, regardless of the insured’s subjective intent, intent is inferred when it is substantially certain that a particular result will follow an intentional act. Id. Compare Butler v. Group Life & Health Ins. Co., 962 S.W.2d 296, 299–300 (Tex. App.—Austin 1998, no pet.) (holding that insured did not intentionally injure himself when he held what he thought was unloaded gun to his head and pulled trigger), with Misle v. State Farm Mut. Auto. Ins. Co., 908 S.W.2d 289, 291 (Tex. App.—Austin 1995, no writ) (holding that insured intentionally injured another as matter of law when he shot BB gun toward crowd, even though he testified he did not intend to hurt anyone).
Tanner, 232 S.W.3d at 333.
The court of appeals then analyzed the specific facts presented to the jury in the declaratory judgment action and found that Gibbons’ intentional conduct in evading the police for an extended period of time and engaging in extremely reckless conduct “carried with it an undisputed and substantial risk that someone would be injured. That risk became less hypothetical and more real the longer the chase continued.” Id. at 335.
This case is again one in which the facts really dictate the coverage. At oral arguments before the supreme court, the parties seemed to agree that, had this chase been very brief in duration, a much better argument existed for coverage. However, the prolonged nature of the chase, along with the numerous violations of the traffic laws, certainly enhanced the argument that the insured ought to have known that bodily injury “would” follow. While it will be interesting to see what the Texas Supreme Court does, it may have little impact on any Texas policy language, given that the Ohio language is much broader than any “intentional” acts exclusion currently utilized in Texas.
COURTS OF APPEALS
The courts of appeals have been more active on personal lines policies, both auto and homeowner. Many of these cases are “not reported” or memorandum opinions but still have value in terms of guidance.
One reported case out of Houston confirmed the principle that an injured passenger cannot stack liability and UM limits in a policy when the only negligence causing the accident was that of the driver of the same vehicle. In Charida v. Allstate Indemnity, 259 S.W.3d 870 (Tex. App.—Houston [1st Dist.] 2008, no pet.), Amal Charida was severely injured while riding in a car owned and driven by her father. Her father ran a red light and caused a collision with another vehicle.
The vehicle was insured with Allstate and carried both liability and UM coverage. After exhausting the liability coverage under the Allstate policy, Charida sought UM coverage under the policy. Allstate denied the claim.
Charida’s bodily injuries resulted in medical bills in excess of $66,000. The policy carried $100,000 in liability limits, but those limits were reduced to $20,000 by the family member exclusion. Charida settled for the $20,000 but then sought the full $100,000 of underinsured motorist benefits.
Charida sued Allstate for breach of contract, as well as violations of the Texas Insurance Code and the Texas Deceptive Trade Practices-Consumer Protection Act. Charida also sought a declaratory judgment that she was entitled to UIM benefits under the policy. The trial court granted Allstate’s summary judgment.
On appeal, the only issue was that the trial court erred in granting summary judgment because the definitional exclusion relied upon by Allstate was unenforceable under the Texas Insurance Code. The court of appeals affirmed the trial court.
Allstate relied upon the language in the policy stating that an uninsured motor vehicle does not include any vehicle “owned by or furnished to or available for use” by the policyholder. Allstate contended that, because the vehicle was owned by the father, it could not be an uninsured/underinsured motor vehicle.
Charida contended that, though the exclusion was applicable, it was not enforceable under the Texas Insurance Code under the circumstances because it contravened public policy. Charida argued that once the family member exclusion was applied, her father was an underinsured motorist as defined by the policy. She contended that whether the “owned by or furnished for regular use” exclusion applies must be decided on a case-by-case basis to determine if the insured would be deprived of the required statutory protection.
The court held, “The purpose of UM/UIM coverage is to protect against the negligence of strangers to the policy, not family members.” Charida, 259 S.W.3d at 877. The court found nothing that would contravene public policy in permitting the exclusion to stand, as the purpose in acquiring UM/UIM coverage is to protect against the negligence of others not of one’s own family members. This case is consistent with the precedent set by other courts of appeals involving similar facts.
WHAT CONSTITUTES BODILY INJURY FOR UM COVERAGE? IT’S AN ERIE GUESS.
Federal courts have been far more active in litigating questions regarding UM coverage. The most notable of those opinions from 2008 is Haralson v. State Farm Mut. Auto. Insurance Co., 564 F. Supp.2d 616 (N.D. Tex. 2008). In Haralson, Mrs. Haralson and her daughter were following behind Mr. Haralson in a separate vehicle when they saw Mr. Haralson’s car get hit by another vehicle. Mrs. Haralson stopped her vehicle and ran to her husband’s car, where she observed him trapped in his vehicle and seriously injured. Mrs. Haralson was not directly involved in the accident.
Following the accident, the Haralsons settled their claims against the driver of the other car, Carmen Andrade-Silva, who had liability coverage in the amount of $20,048 per person or $40,048 per incident. Mr. Haralson accepted the per-person policy limit of $20,048. Mrs. Haralson and her daughter jointly settled their claims against Andrade-Silva for $18,000.
The Haralsons then filed a claim for UIM benefits under their policy with State Farm. The Harlasons’ policy had UM limits of $50,000 per person. The relevant portion of the policy provided:
We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person caused by an accident.
Although State Farm tendered the $50,000 per-person policy limit to Mr. Haralson, it refused to pay Mrs. Haralson because, inter alia, she did not sustain a “bodily injury . . . caused by [the] accident.”
Unable to resolve their claims through negotiation, the Haralsons filed separate lawsuits against State Farm in state district court. State Farm timely removed both cases to federal court, where they were consolidated into one action. The Haralsons asserted claims for breach of contract and violations of the Texas Insurance Code. Because an insurer’s contractual obligation to pay UIM benefits does not arise until liability and damages are determined, the court ordered separate trials—one trial on liability and damages and, if necessary, a second trial on the Haralsons’ contract and extracontractual claims.
Prior to the first trial, State Farm stipulated that the underinsured driver, Andrade-Silva, was liable for the accident and that Mr. Haralson incurred medical expenses in excess of $100,000. The issues of whether Mrs. Haralson sustained damages because of “bodily injury” and, if so, the amount of those damages, were tried to a jury.
The jury concluded that the physical manifestations of extreme emotional distress exhibited by Mrs. Harlason as a direct result of the accident—including migraines, headaches, stomachaches, and sleeplessness—entitled her to $25,000 for her “bodily injuries” incurred from observing the accident. The jury also awarded Mrs. Haralson $15,000 for loss of consortium and $1,000 for loss of household services.
State Farm moved for judgment as a matter of law on the grounds that (1) Mrs. Haralson did not suffer a “bodily injury” as required by the policy, (2) the evidence is legally insufficient to support a claim for bystander damages, (3) loss of household services and loss of consortium are not “bodily injuries” as a matter of law, and (4) any recovery should be offset by the amount of money available from the underinsured driver.
The majority of the opinion deals with the issue of what constitutes bodily injury under a standard insurance UM coverage when the term “bodily injury” is not defined. The Northern District of Texas admitted that the Texas Supreme Court had never addressed the issue and thus, their opinion would be nothing more than an Erie guess. The court examined out-of-state case law on the issue, as well as other Texas cases dealing with emotional injuries and the issue of what constitutes bodily injury under other types of policies, in reaching its conclusion that Mrs. Haralson had in fact suffered “bodily injury” as a direct result of the accident. The court found it persuasive that Mrs. Haralson had contemporaneously observed the accident as a bystander and as a direct result of what she saw suffered physical manifestations of her emotional distress. See Haralson, 564 F. Supp.2d at 621–25.
Another interesting aspect of the case was the specificity of the jury instruction regarding bodily injury. The jury was instructed as follows: “[d]amages in this case are limited to the bodily injuries suffered by Virginia Haralson as a result of a direct emotional impact from her sensory and contemporaneous observance of the accident in question.” Id. at 626. Thus, the court effectively narrowed the damages recoverable by Mrs. Haralson.
A final important aspect of the case is the potential extra contractual claims of Mr. Haralson. Before the lawsuit was filed, State Farm tendered to the Haralsons a $50,000 check made out to both the Haralsons in exchange for a full release. The Haralsons refused to sign the release. Although State Farm subsequently reissued a $50,000 check to Mr. Haralson and his attorney, that check also was rejected, ostensibly because State Farm waited nearly ten months before reissuing the check in proper form. That delay was the subject of Mr. Haralson’s claims for breach of contract and violations of the Texas Insurance Code. At trial, State Farm stipulated that Mr. Haralson’s damages exceeded $100,000 and in fact, never really contested that Mr. Haralson was entitled to the full per-person policy limit.
The extra-contractual claims were recently addressed in part in Haralson v. State Farm Mutual Auto Ins. Co., No. 3-05-CV-2513-BD, 2008 WL 4821326, at *1 (N.D. Tex. Nov. 5, 2008) (slip op.). There, the court granted State Farm summary judgment on its extra contractual claims as to Mrs. Haralson, as State Farm had paid the judgment in the contractual benefits case within sixty days in compliance with the Insurance Code.
However, as to Mr. Haralson’s extra contractual claims, the court found that a fact issue existed as to whether State Farm’s tender of the first check for $50,000, made out to both Mr. and Mrs. Haralson, was in fact, an offer to settle both of their UM claims for the $50,000. The court reasoned as follows:
Unlike Virginia’s claim for bodily injuries sustained as a result of witnessing the automobile accident, State Farm never disputed that Fred sustained bodily injuries in excess of the $50,000 UIM policy limit. Nor is there any dispute that Fred was legally entitled to recover those damages from the owner or operator of an underinsured motor vehicle. Yet, State Farm waited until January 31, 2006-more than 10 months after the accident-to issue a settlement draft to Fred and his attorney for the $50,000 policy limits. Prior to that time, State Farm insisted on including Virginia as a payee on the check, despite repeated letters from opposing counsel notifying the adjuster that Fred and Virginia were making separate claims for UIM benefits.
At least two Texas courts have held that including the spouse of a settling party as a payee on a settlement draft raises a fact issue as to whether the parties intended to settle the spouse's separate claim. See, e.g., French v. Henson, No. 05-06-01036-CV, 2008 WL 2266119, at *1 (Tex. App.—Dallas, June 4, 2008, no pet.); Harris v. Balderas, 27 S.W.3d 71, 78 (Tex. App.—San Antonio 2000, pet. denied). If Fred is able to convince a jury that State Farm improperly conditioned the payment of his UIM claim on the release of Virginia's claim for bodily injury damages, State Farm may be liable for breach of contract and delay damages under the Texas Insurance Code. See Keeling v. State Farm Lloyds, No. 3-01-CV-1285-BD, 2002 WL 31230804, at *4 (N.D. Tex. Sept. 30, 2002).
Haralson, 2008 WL 4821326, at *4.
Thus, it appears that Mr. Haralson will get a third bite at the apple to attempt to prove additional damages under the Texas Insurance Code. However, even if he is unable to prove a breach of the duty of good faith and fair dealing or other statutory duty, he is likely still entitled to the 18% statutory penalty, as well as attorney’s fees under the Prompt Payment Statute.
The Haralson holding on “bodily injury” was quickly followed in Lizanetz v. St. Paul Guardian Ins. Co., No. 3-07-CV-0123-BD, 2008 WL 2815561, at *3 (N.D. Tex. July 21, 2008) (slip op.); however, the Lizanetz case did not have evidence of any physical manifestations of extreme emotional distress.
DOES LATE NOTICE OF UM CLAIM EQUAL PREJUDICE?
The Lizantez case also addressed the issue of whether “late notice” of a UM claim required prejudice be proven by the Insurer in order to void coverage. The court said yes.
In Lizanetz, plaintiffs were involved in a motor vehicle accident with a gravel truck operated by James Parker. The truck was owned by Manuel Gonzales d/b/a R & M Trucking (“R & M”) and insured by Legion Indemnity Company (“Legion”). More than a year later, on December 4, 2001, plaintiffs sued Parker, Gonzales, and R & M in Texas state court. Unbeknownst to plaintiffs, R & M had filed for bankruptcy before the lawsuit was filed. Legion, who had admitted liability, went into receivership and was declared insolvent during the pendency of the state court action.
On October 4, 2004, each member of the Lizanetz family obtained a $1 million judgment against Parker and Gonzales. Five months after the state court action was resolved by final judgment, Glen Lizanetz called his insurance company, St. Paul, to advise that the family would be seeking UM benefits under their policy. Written notice of the UM claim was submitted to St. Paul on April 19, 2005. Although St. Paul never formally denied the claim, it refused to pay UM benefits because plaintiffs failed to provide “prompt notice” of the automobile accident and their subsequent lawsuit against Parker and Gonzales.
The St. Paul policy provided, in pertinent part:
a. In the event of accident, claim, suit or loss, you must give us or our authorized representative prompt notice of the accident or loss. If we show that your failure to provide notice prejudices our defense, there is no liability under the policy. Include:
(1) How, when and where the accident or loss occurred;
(2) The insured’s name and address; and
(3) To the extent possible, the names and addresses of any injured persons and witnesses.
b. Additionally, you and any other involved insured must:
* * * *
(2) Immediately send us copies of any demand, notice, summons or legal paper received concerning the claim or suit.
The UM coverage also required the insured to give the carrier prompt notice if a lawsuit was filed.
There were disputed fact issues raised regarding when the Lizanetz family first reported the accident and potential UM claim to the carrier. Additionally, the court found that the conclusory statements by St. Paul as to what it might have done had it been aware of the liability lawsuit, did not establish prejudice as a matter of law and thus, a fact question existed as to whether or not St Paul had been prejudiced by the Plaintiffs’ actions. Lizanetz, 2008 WL 2815561, at *3.
STOWERS—WHAT’S NEW
The Stowers doctrine remains one of the most effective methods for a plaintiff to convince the insurance carrier of a negligent third party to settle a case. If all of the elements of a Stowers demand are presented properly to the carrier for the negligent party, the carrier must carefully weigh the liability and damage factors as if its own assets were at stake.
The elements are fairly simple. The claim against the insured must be within the scope of coverage. The demand must be reasonable, must be within policy limits, must offer to release the insured fully, and must offer to satisfy and secure a release of all liens. The demand must be unconditional. As a cautionary tale, make sure the demand offers to release the insured to whom coverage is actually owed. See Home State County Mut. Ins. Co. v. Horn, No. 12-07-00094-CV, 2008 WL 2514332, at *3–6 (Tex. App.—Tyler, June 25, 2008, pet. filed Oct. 1, 2008) (mem. op.).
But, recent Texas Supreme Court decisions may impact how a party can make a proper Stowers demand if there are multiple carriers involved. In Mid-Continent Ins. Co. v. Liberty Mutual, 236 S.W. 3d 765 (Tex. 2007), the supreme court held that when multiple carriers were at risk, they did not owe each other any duties with regard to settlement and could not seek reimbursement for a pro rata share of a settlement. The court noted in its opinion that the $1.5 million dollar demand was not within the $1 million dollar limit of either of the two policies, and thus no Stowers exposure to the insured existed. See Mid-Continent, 236 S.W.3d at 771. So the question becomes, can a plaintiff “Stowerize” a carrier when there are multiple carriers who cover the same risk? Certainly a proper Stowers demand made to only one carrier for its policy limits would result in a full release for the insured and thus, relieve the second carrier of any duty or obligation to protect the insured. A demand for the combined limits to both carriers puts the carriers in the position of having to fight the issue out later with no guarantee of the court enforcing any “other insurance” provisions. However, such a demand does not permit either carrier to settle within their policy limits. With the “other insurance” clauses in each policy, can the policies now be stacked? If no “equitable right” of subrogation exists between carriers, will the net result be that there is less incentive to settle the “big dollar” cases even if the insured is exposed because a proper Stowers demand cannot be made? These practical issues are only now beginning to work their way through the courts.
Further, the opinion in Don’s Building Supply, Inc. v. One Beacon, 267 S.W.3d 20 (Tex. 2008) (reh’g denied Nov. 14, 2008), complicates matters even more. Don’s Building held that under standard liability policies, all policies in effect when the injury “in fact” occurred must provide relief to the extent of damages attributable to their specific policy period. 267 S.W.3d at 25–26. Thus, what constitutes a proper Stowers demand when each carrier is only liable for the damages attributable to their policy period potentially involves levels of higher math to which lawyers are not accustomed. While these issues are unlikely to arise in the run-of-the-mill auto accident case, they present very sticky problems for the plaintiffs in catastrophic injury cases, as well as “long tail” claims.
CONCLUSION
While there are few reported opinions effecting Uninsured Motorist or Personal Injury Protection coverage directly, those that were reported established some well-reasoned rules of law. The Texas Supreme Court settled a few questions, took others under advisement, and threw into question some established principles. The lesson of 2008 is to be sure and look beyond the case law on a particular policy to find your answer, as that appears to be the direction the Texas Supreme Court will take.
Lisa A. Songy is a partner with Shannon, Gracey, Ratliff & Miller, LLP. Her practice includes First Party and general civil litigation as well as coverage opinions for insurance carriers on both personal and commercial line policies. Contact Lisa Songy at (214) 245-3063 or lsongy@shannongracey.com
