553 S.W.3d 586
Tex. App.2018Background
- In May 2008 Brian Loncar collided with a City of Dallas fire truck driven by a city employee responding with lights and siren; Loncar and his wife (and later their children) sued the City and the driver.
- The City asserted official/governmental immunity; on interlocutory appeal this court held the driver acted in good faith and thus was immune, dismissing remaining claims against the City.
- The Loncars amended to add insurers Progressive (primary commercial auto policy) and Chubb (excess policy with uninsured/underinsured motorist coverage) and sued them for breach, Insurance Code violations, and declaratory relief after insurers declined to pay.
- Both insurers moved for summary judgment; the trial court granted summary judgment for Progressive and Chubb and entered a take-nothing judgment; the Loncars appealed.
- Central legal question: whether the policy language "We will pay damages which an 'insured' is legally entitled to recover from the owner or operator of an 'uninsured motor vehicle'" requires that the insured be legally entitled to recover from the tortfeasor (i.e., not barred by immunity) before uninsured motorist (UM/UIM) coverage applies.
- The court concluded the policy is unambiguous: UM/UIM coverage requires a legal entitlement to recover from the other vehicle’s owner/operator; official immunity defeated that entitlement, so no coverage under Progressive or Chubb (Chubb follows the primary policy).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Whether Progressive's UM/UIM clause covers losses when the tortfeasor is immune | Loncar: clause should cover when the tortfeasor was at fault; immunity shouldn't defeat coverage; Franco/Blakemore support | Insurers: "legally entitled to recover" means the insured must have a legal right to recover a judgment; immunity defeats that right so no coverage | Held for defendants: clause unambiguous; immunity means insured not "legally entitled to recover," so no coverage |
| 2. Whether differing precedent (Franco/Blakemore) requires coverage despite immunity | Loncar: relies on Franco dicta and Blakemore to argue coverage despite immunity | Insurers: Franco dicta is non-binding and not dispositive; plain text controls | Held: Franco dicta is inapposite; plain meaning governs; Blakemore not persuasive |
| 3. Whether public policy (settlement incentives / not extending immunity to insurers) makes clause ambiguous | Loncar: ruling chills settlement and effectively extends immunity to insurers, producing absurd results | Insurers: settlement practice and public-policy concerns do not change plain meaning; immunity here is not absolute and could be overcome on facts | Held: policy language remains unambiguous; public-policy arguments unavailing |
| 4. Whether Chubb (excess) must pay if Progressive (primary) owes nothing | Loncar: Chubb's follow-form language and drop-down provisions would have provided broader coverage absent Progressive, making Chubb ambiguous | Chubb: its policy follows the required primary; it remains excess and does not drop down to act as primary; it covers only what primary covers | Held: Chubb entitled to summary judgment; its follow-form means it provides no broader coverage than Progressive in this case |
Key Cases Cited
- Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W.3d 254 (Tex. 2017) (ordinary-contract rules govern policy interpretation)
- Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006) (UIM insurer not obligated to pay until insured obtains judgment establishing liability)
- Franco v. Allstate Ins. Co., 505 S.W.2d 789 (Tex. 1974) (discussion regarding limitations and the phrase "legally entitled to recover" is dicta for that case)
- Blakemore v. United Servs. Auto. Ass'n, 782 S.W.2d 277 (Tex. App.-Waco 1989) (interpreting "legally entitled to recover" to preclude applying government immunity to insurer)
- Soledad v. Tex. Farm Bureau Mut. Ins. Co., 506 S.W.3d 600 (Tex. App.-Austin 2016) (workers' comp exclusivity bars insured from being "legally entitled to recover")
- Valentine v. Safeco Lloyds Ins. Co., 928 S.W.2d 639 (Tex. App.-Houston [1st Dist.] 1996) (same principle under workers' compensation exclusivity)
- Great Am. Ins. Co. v. Primo, 512 S.W.3d 890 (Tex. 2017) (courts will not rewrite insurance policies)
- Greene v. Farmers Ins. Exch., 446 S.W.3d 761 (Tex. 2014) (prescribed-form policies are interpreted by their ordinary public meaning)