Rаndal F. BLACK, C.O. Daniel and Lisa Jeanine Sudderth, Petitioners, v. VICTORIA LLOYDS INSURANCE COMPANY, Respondent.
No. C-8805.
Supreme Court of Texas.
Sept. 12, 1990.
Rehearing Overruled Nov. 14, 1990.
HIGHTOWER, Justice.
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29. The Lower Colorado River Authority plans to install a 345/138 kv transformer at its Salem substation in or before 1988.
30. The 345/138 kv autotransformer would make the power flowing across the proposed transmission line available to customers in the area; by providing customers in the area a bulk power transmission path from the east, the proposed transmission line would make electrical service in the area more reliable.
31. Construction of the proposed transmission line would provide LCRA with a 345 kv transmission path to the west for power produced at its Fayette plant.
32. The proposed line would improve service to electric customers in the area by reducing line losses, making service more reliable, and releasing the capacity now reserved for wheeling.
B. Conclusions of Law
1. The Commission has jurisdiction over this application pursuant to the
2. Houston Lighting and Power Company is a public utility as defined by
3. HL & P published notice of its application in compliance with
4. HL & P was required by
5. A hearing on the application was held pursuant to
6. HL & P and the intervenors presented sufficient evidence upon which the Commission can make findings of fact in compliance with
7. Taking into consideration the adequacy of existing service, the need for additional service, the effect of the granting of a certificate on HL & P and other electric utilities in the proximate area, and the probable improvement of service of lowering of cost to consumers in the area, it is apparent that the certification of the proposed facilities is necessary for the service, accommodation, convenience, and safety of the public, thereby satisfying the requirements of
8. The proposed facilities will not have a significant adverse effect on such factors as community values, recreational and park areas, historical and aesthetic values, and environmental integrity.
9. HL & P‘s certificates of convenience and necessity should be amended to include the proposed facilities as described in HL & P‘s application.
W. James Kronzer, Mary Jensen, Kathlyn A. Knobloch, Jimmy Williamson, Houston, for petitioners.
Michael C. Neel, Charles Seymore, Mark D. Wilson, Houston, for respondent.
HIGHTOWER, Justice.
This summary judgment case involves the issuance of an insurance “identification card” pursuant to
The issues before this court are (1) whether there are genuine issues of material fact concerning misrepresentation of the liability insurance coverage for personal use which preclude summary judgment, (2) whether there are genuine issues of material fact concerning waiver of the policy‘s permissive personal use exclusion which preclude summary judgment and (3) whether Victoria Lloyds’ motion for summary judgment failed to address all of the asserted causes of action.
In 1982, Daniel and Statewide Trucking, Inc. d/b/a Wood Brothers Transfer, Inc. (Wood Brothers) entered into a “lease” arrangement in which Daniel “leased” his pickup truck to Wood Brothers for Daniel‘s use in conducting Wood Brothers’ business. Wood Brothers purchased a policy of liability insurance from Victoria Lloyds which met the requirements of
After proof was furnished to the Texas Railroad Commission that Wood Brothers carried the minimum liability insurance required by
Pursuant to
In October, 1982, Sudderth, Daniel‘s daughter, was involved in an accident with Black while driving her father‘s pickup truck on a personal matter. After Victoria Lloyds denied coverage, Black sued Sudderth, Daniel, Wood Brothers and Victoria Lloyds. After realignment of the parties and severance of a portion of the lawsuit,3 Black, Sudderth and Daniel asserted causes of action against Victoria Lloyds for breach of contract, violations of the Texas Deceptive Trade Practices—Consumer Protection Act (DTPA) and
I.
Black, Sudderth and Daniel argue that there are genuine issues of material fact concerning misrepresentation of the liability insurance coverage for personal use which preclude summary judgment. We agree.
The standards for reviewing a motion for summary judgment are well established. The movant has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986). In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor.
Black, Sudderth and Daniel assert that the article 6701h insurance card together with Daniel‘s opposing summary judgment affidavit raise a fact issue concerning misrepresentation of the liability insurance coverage provided by Victoria Lloyds for the drivers of Wood Brothers’ leased vehicles. It is undisputed that the insurance card was the only representation made by Victoria Lloyds to Daniel concerning the scope of insurance coverage. The insurance card given to Daniel by Wood Brothers simply states: “THIS POLICY COMPLIES WITH THE COMPULSORY AUTO LAWS OF THE STATE OF TEXAS.” Nothing in the insurance card or the requirements of article 6701h distinguishes between liability insuranсe for business or personal use. The insurance card does not restrict liability insurance coverage to business use or exclude personal use. It gives no indication that Daniel does not have liability insurance coverage for personal use of his truck. For example, the insurance card does not state that it only applies when the truck is used for business purposes only.6 Furthermore, there is no indication on the insurance card or otherwise that Daniel was exempt from the requirements of article 6701h.
In response to Victoria Lloyds’ motion for summary judgment, Black, Sudderth
Although Daniel lacked liability insurance coverage for personal use of his truck, his insurance card was sufficient evidence of financial responsibility to have complied with the requirements of article 6701h.7 Undoubtedly, presentment of the insurance card to a law enforcement officer would indicate that the operator of the truck has “a policy of automobile liability insurance in at least the minimum amounts to provide evidence of financial responsibility ... tо insure against potential losses which may arise out of the operation of that vehicle.”
II.
Black, Sudderth and Daniel argue that there are genuine issues of material fact concerning waiver of the policy‘s permissive personal use exclusion which preclude summary judgment. We agree.
The general provisions of the insurance policy provided coverage for persоns using or operating an owned or hired automobile with the permission of the named insured.9
An agent with authority to bind the insurer concerning coverage may waive exclusionary provisions of an insurance policy by a later representation at variance with the written terms of the policy. See Royal Globe Insurance Co. v. Bar Consultants, Inc., 577 S.W.2d 688, 693 (Tex.1979); New York Fire Insurance Co. v. Reed, 138 S.W.2d 138 141-142 (Tex.Civ.App.-Amarillo 1939, writ ref‘d); Home Insurance Co. v. Roberts, 129 Tex. 178, 100 S.W.2d 91, 93 (1937). Summit General Agency, Inc. provided the insurance card to Wood Brothers for distribution to drivers of “leased” vehicles such as Daniel. Victoria Lloyds does
not dispute that Summit General Agency, Inc., its attorney-in-fact, had authority to bind it concerning coverage. In response to Victoria Lloyds’ motion for summary judgment, Black, Sudderth and Daniel pleaded that Victoria Lloyds waived the policy provisions excluding coverage for permissive personal use of Daniel‘s vehicle by a later representation in the insurance card that was at variance with the written terms of the policy.
Black, Sudderth and Daniel submitted the insurance card and Daniel‘s affidavit which stated, among other things, that (1) he was aware that Texas law required him to have liability insurance on his truck for personal and business use, (2) he believed that the information on the insurance card confirmed his understanding that he was purchasing “complete liability insurance” and (3) it was his understanding from the insurance card that the insurance policy covered his truck for business and personal use. The insurance card issued to Daniel does not distinguish between liability insurance for business or personal use. The issuance and contents of the insurance card and Daniel‘s affidavit raise fact issues concerning whether Victoria Lloyds waived the policy provisions excluding coverage for personal use of Daniel‘s vehicle by a later representation in the insurance card that was at variance with the written terms of the policy. Therefore, we hold that there are issues of material fact concerning waiv-
III.
Black, Sudderth and Daniel argue that Victoria Lloyds’ motion for summary judgment failed to identify or address all of their causes of action. We agree.
Black, Sudderth and Daniel asserted causes of action against Victoria Lloyds for breach of contract, violations of the DTPA and the Insurance Code, negligence, gross negligence, fraud, and breach of duty of good faith and fair dealing. Victoria Lloyds’ motion for summary judgment asserted that there were no misrepresentations as a matter of law, that there was no insurance coverage for the accident and that Black and Sudderth had no standing to sue for misrepresentation and fraud. Although the motion for summary judgment stated that it “embraces all causes of action asserted by Plaintiff and Cross-claimants,” the motion failed to identify or address the causes of action for violations of the DTPA and the Insurance Code, negligence, gross negligence and breach of duty of good faith and fair dealing or their elements. The trial court granted thе motion for summary judgment concerning all causes of action asserted against Victoria Lloyds.
For the reasons explained herein, we reverse the judgment of the court of appeals and remand the cause to the trial court for further proceedings.
Dissenting opinion by HECHT, J., joined by PHILLIPS, C.J., and GONZALEZ and COOK, JJ.
HECHT, Justice, dissenting.
When Lisa Jeanine Sudderth ran her father‘s pickup into Randal Black‘s car she had no idea whether she was insured. In fact, she was not. But her father, C.O. Daniel, believed she was, and he had an “identification card” which his employer had given him that he thought said she was, although it did not exactly say that. So the Court concludes from this that an insurance company which never had any dealings with Sudderth or Daniel should be
Daniel‘s employer, Wood Brothers, bought a liability insurance policy from Victoria Lloyds covering various trucks used in its business, including Daniel‘s pickup, which he leased to Wood Brothers. The policy covered Daniel‘s pickup only when it was being used on Wood Brothers’ business. This is the policy Wood Brothers wanted and paid for. Victoria Lloyds gave Wood Brothers a number of small identification cards which it believed Wood Brothers needed to comply with
Daniel and Victoria Lloyds never had any contact until after Sudderth‘s accident. Victoria Lloyds did not give Daniel the identification card; Victoria Lloyds gave the card to Wood Brothers and Wood Brothers gave it to Daniel. This fact is most important because the statement in the card as a representation by Victoria Lloyds to Wood Brothers and its drivers while engaged in its business was absolutely true. Had Victoria Lloyds made the same representation about this policy to anyone else, it would not have been true. Victoria Lloyds did not make the representation to Daniel; Wood Brothers did. If Wood Brothers had told Daniel that the statement on the card applied to him only while he was driving his truck on Wood Brothers’ business, then the statement would have been true. But Wood Brothers did not explain the card to Daniel.
The Court implies that Victoria Lloyds intended that Wood Brothers give the cards to its drivers, suggesting, I suppose, that Victoria Lloyds is responsible for Wood Brothers’ failure to еxplain the cards to its drivers. The Court states: “Victoria Lloyds issued insurance cards to Wood Brothers for distribution to all its drivers“. Supra at 22. This statement is only half-true: the summary judgment record establishes without contradiction that Victoria Lloyds issued cards to Wood Brothers for distribution to its drivers for use in their employment. Specifically, Victoria Lloyds’ representative testified at his deposition in response to questions by opposing counsel:
Q. All right. And the purpose of you giving the card to Wood Brothers
A. For the purpose of while they worked for Wood Brothers.
Q. I understand your position on that....
There is no basis in the allegations of the parties or the summary judgment record for holding Victoria Lloyds responsible for Wood Brothers’ distribution of the identification cards. What if Wood Brothers had given cards to customers or friends, or just passed them out on the street? Would each recipient be entitled to conclude that he was suddenly covered by a liability insurance policy that he had never seen issued by Victoria Lloyds, a company that he did not even know existed? Could anyone who happened to come upon a stray card file a claim with Victoria Lloyds and when it was denied, sue for negligence, statutory violations, fraud and bad faith? In the context of this case, what if Daniel had given the card to Sudderth to use while driving her own car?
I suppose even this Court would have to strain to extend its bearer-bond notion of these simple little identification cards quite that far. The Court‘s view strikes me a little like holding the State of Texas liable for a driver‘s negligence because it licensed him to drive, or holding a bank liable to pay a bounced check bеcause it represented that the issuer had an open account. Perhaps that is why the Court repeats that it is the card and Daniel‘s affidavit—each time stressing that both must be taken together—that raise a fact issue in this case. The Court leaves the impression, although it never clearly states, that the card itself in this case does not raise a fact issue as to whether Victoria Lloyds is liable on the claims asserted.
It is hard to see, however, how Daniel‘s affidavit contributes to raising a fact issue. It establishes that the premiums for the coverage of his pickup were deducted from his pay, but this shows only that Daniel paid for his own business insurance. Daniel never paid for liability insurance covering the personal use of his truck, and he does not claim otherwise. Daniеl asserts that a Wood Brothers employee told him that the company liability policy covered his personal use of his pickup (although his deposition testimony was mostly to the contrary), but he never asserts that Victoria Lloyds told him so, and Wood Brothers’ representation, if it was made, is not even alleged to be attributable to Victoria Lloyds. Daniel says he was never told that personal use of his pickup was not covered by the policy, and that if he had been, he would have purchased his own liability insurance; but surely Victoria Lloyds had no duty to go around telling its insured‘s employees one by one as they came and went from time to time that they were not covered by one of its policies. Daniel stresses in his affidavit that he believed he was covered by the Victoria Lloyds policy. But how can Daniel‘s subjective, unexpressed belief, however sincere, alter the fact that he was never insured?
The Court seems to say this: if you pay someone for some kind of insurance and he gives you a card that says you are insured, but you never contact an insurer or an agent and you never see a policy, but you still believe in your heart that you are insured, then you may very well be insured. This Cartesian theory of insurance—“I believe, therefore I am insured“—is not only far-fetched, it is completely unworkable. What are the limits of the coverage the Court thinks Daniel might have? The minimum statutory limits that the card referred to? The limits of Wood Brothers’ policy? The limits Daniel wishes he had, or that Black hopes he had? What are the terms of this imaginary poliсy? The standard terms, whatever those are? The terms Daniel thought he had? At the trial of this case, will the jury be asked to make up some terms and limits and coverages for this made-up policy? Or is it all much simpler? Will the jury simply be asked to award punitive damages against Victoria Lloyds for allowing Daniel to believe he was insured when he was not? The Court does not attempt to answer any of these questions.
The Court reiterates that there are fact issues in this case that must be tried, but I am at a loss to see what they are. The Court mentions two: “concerning misrepresentation of the liability insurance coverage
If there are fact issues in this case, could there ever be such a case in which there were not fact issues? How could these facts be changed to entitle Victoria Lloyds to summary judgment? The Court put these very quеstions to petitioners’ counsel. What if Victoria Lloyds had stamped the card, “Not Valid for Personal Use“?
COUNSEL: On the facts of this particular case, that may have done it. But again, we‘d have to look at the entire record to see if the conduct of the insurance company‘s is misleading, because questions of whether or not something is a misrepresentation, or a question of whether it‘s misleading, or a question of whether it‘s negligence, is just so inherently an issue of fact that it‘s hard to ever resolve it by summary judgment....
What if Victoria Lloyds had added to the card something to the effect, “See policy for details“?
COUNSEL: That is exactly the point. The point is, if they had done that, would that conduct have been negligent or not? Would they then have provided enough information to dischargе the burden of a reasonably prudent person? That is a question of fact that should be resolved by the trier of fact, not resolved by summary judgment.
Well, then, what if Victoria Lloyds had given Daniel the entire policy, all 27 pages of it? Would that fact entitle Victoria Lloyds to summary judgment? Is there any way to get a summary judgment in a case like this?
COUNSEL: I would be hard pressed—as a lawyer who works on the plaintiffs’ side of the bar—I would be hard pressed to fault an insurance company who gave somebody an insurance policy by them saying, well, this policy is confusing so therefore it‘s inherently misleading. I mean—so if they had just given the policy, I think, I fail to see how that‘s going to—that‘s going to be hard to make a misleading argument. Perhaps they could then engage in other conduct. And in fact—see, it‘s not just the language оf the policy, it‘s the conduct: not only the issuance of the card, but the omission to state the fact. It‘s all that conduct that we are claiming raises a fact issue on the misleading aspect of their transaction.
Petitioners’ counsel could not imagine even one scenario in which summary judgment would be proper. Given the Court‘s view, I cannot either. Unless the Court means to abolish summary judgments against plaintiffs who sue insurance companies in all cases, it should attempt what petitioners have failed—to explain how summary judgment could be granted.2
I dissent.
PHILLIPS, C.J., and GONZALEZ and COOK, JJ., join in this dissenting opinion.
Notes
(a) On and after January 1, 1982, every owner and/or operator in the State of Texas shall be required, as a condition of driving, to furnish, upon request, evidence of financial responsibility to a law enforcement office of the State of Texas or any subdivision thereof, or agent of the Department, or to another person involved in an accident.
(b) The following evidence of financial responsibility satisfies the requirement of Subsection (a) of this section:
(2) a written instrument issued by a liability insurer that includes:
(A) the name of the insurer;
(B) the insurance policy number;
(C) the policy period;
(D) the name of the insured; and
(E) the policy limits or a statement that the coverage of the policy complies with the minimum amount of liability insurance required by this Act....
The Court calls this concern about the impact of its decision on summary judgment practice speculation and declines to consider it for “obvious reasons“. Supra at 24. Those unstated reasons must not have been obvious to the Court when it questioned counsel extensively on the subject at oral argument, nor are they obvious to me now. I am not aware that it is improper for the Court to consider the effect of its decisions on the law. Despite the Court‘s insistence that it has not abolished summary judgments in suits against insurance companies, it does not offer either an example or an explanation of how a summary judgment might be appropriate.(FRONT)
Victoria Lloyds
Houston, Texas
IDENTIFICATION CARDPolicy Number: GLA 0550 Expires 1/20/83
Insured 1) Wood Brothers Transfer, Inc.
2) Statewide Trucking
2410 Commerce
Houston, Texas 77003
Agent SUMMIT GENERAL AGENCY, INC.(BACK)
THIS POLICY COMPLIES WITH THE COMPULSORY AUTO LAWS OF THE STATE OF TEXAS
IF YOU HAVE AN AUTOMOBILE ACCIDENT
1. Stay calm. DO NOT leave the scene.
2. Do not discuss the accident with anyone but the police or an authorized representative of Victoria Lloyds.
3. Be sure to obtain: The owner and driver‘s name, address, license number, both plate and driver‘s license number, their insurance company, name and address of injured persons and extent of injury and witnesses’ names and addresses.
4. Write down the details.
5. As soon as possible, notify your agent or the Insurance Company, 1-713/527-0444, 3131 W. Alabama, Houston, Texas 77098.
A person who holds the legal title of a motor vehicle, or in the event a motor vehicle is the subject of an agreement for the conditional sale or lease thereof with the right of purchase upon performance of the conditions stated in the agreement and with an immediate right of pоssession vested in the conditional vendee or lessee or in the event a mortgagor of a vehicle is entitled to possession, then such conditional vendee or lessee or mortgagor shall be deemed the owner for the purposes of this Act.
Proof of ability to respond in damages for liability, on account of accidents occurring subsequent to the effective date of said proof, arising out of the ownership, maintenance or use of a motor vehicle, in the amount of Ten Thousand Dollars ($10,000) because of bodily injury to or death of one person in any one accident, and, subject to said limit for one person, in the amount of Twenty Thousand Dollars ($20,000) because of bodily injury to or death of two (2) or more persons in any one accident, and in the amount of Five Thousand Dollars ($5,000) because of injury to or destruction of property of others in any one accident.
Each of the following is an insured under this insurance to the extent set forth below:
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(c) any other person while using an owned automobile or a hired automobile with the permission of the named insured, provided his actual operation or (if he is not operating)
Automobile endorsement TX-06-21 “Truckmen-Hired Automobiles” provides in pertinent part:1. With respect to the insurance for bodily injury liability and for property damage liability afforded by this endorsement the “Persons Insured” provision of the policy is replaced by the following:
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None of the following is an insured:
(i) any person or organization, or any agent or employee thereof, other than the named insured or an employee thereof, engaged in the business of transporting property by automobile for the named insured or for others under any of the following conditions:
(1) if the bodily injury or property damage occurs while such automobile is not being used exclusively in the business of the named insured and over a route the named insured is authorized to serve by federal or public authority....
It is agreed that the insurance with respect to owned automobiles applies to the maintenance or use, including loading and unloading of hired automobiles, subject to the following provisions:
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(d) The insurance does not cover as an insured, the owner or any lessee (of whom the named insured is a sub-lessee) of a hired automobile, or any agent or employee of such owner or lessee, if the bodily injury or property damage occurs:
(1) while the automobile is not being used exclusively in the business of the named insured and over a route the named insured is authorized to serve by federal or public authority....