*1 CELTIC LIFE INSURANCE
COMPANY, Petitioner, COATS, Jr., Respondent.
John D.
No. D-2775.
Supreme Court of Texas.
June
Opinion Concurring on Rehearing
Chief Phillips Justice Nov. *2 presents relating
This case
three issues
company’s liability
an insurance
for
its
first,
representations:
whether
liability depends on
authoriza-
company’s
second,
misrepresentations;
tion of
whether
reliance on the
element
third,
recovery;
the insured’s
and
whether
misrep-
should be trebled when
“knowing-
resentations were
committed
ly.”
affirmed the trial
judgment
against
court’s
on a
verdict
the insurer.
I. Harrell, duly-appointed Kenneth a Co.,1 for Celtic Life Insurance visited Aloha September Pools in and met with its owner, Coats, John to discuss health insur- employees ance for Aloha’s and their fami- lies. that he a Coats stated wanted providing psychiatric benefits for care that $20,000 equal would be to or better than the coverage provided by his current explained Coats that he such needed cover- age previously because his oldest son had care, required psychiatric and he was con- younger might require cerned that his son responded similar care. Harrell un- that he fully, having experi- derstood Coats’ needs provid- enced similar financial difficultiеs in ing psychiatric care for his own son. subsequently proposed Harrell that Coats Ebanks, Alice M. Giessel and E. James purchase specific policy written Celtic— Houston, petitioner. provided a maximum lifetime Longley, hospitalization Philip Joe K. Tim benefit of million. Harrell $1 Labadie and K.
Maxwell, Austin, point psychiatric respondent. did not out that benefits $10,000.
under the were limited to SPECTOR, Justice, opinion delivered the manager, Coats asked his business Paula Court, PHILLIPS, which Chief Englemann, to review Celtic’s brochure and Justice, GONZALEZ, HIGHTOWER, and the matter further with Harrell. En- discuss HECHT, DOGGETT, CORNYN and $10,000 glemann noticed the limit on benefits GAMMAGE, Justices, join. care, questioned Harrell grant meaning. John D. motion for re- about its Harrell assured her that $10,000 hearing prior opinion applied only out-patient and withdraw our limit judgment. following representa- opinion psychiatric care. Based on that now tion, Englemann of the Court. recommended to Coats that 1(a) (requiring duly-authorized appointed 1. See TexIns.Code art. insur- carrier). any person desiring to act as purchase policy, he The trial court rendered on the Coats Coats, agreed. in favor of and the court of verdict appeals affirmed. 831 January Harrell Kenneth ob- cards, applica- tained enrollment filled out an II. *3 tion, premium and collected an initial in or- argues that it held Celtic should not be der to obtain for Aloha’s Celtic responsible representations for Harrell's employees. He then forwarded the enroll- first, was a mere soli- two reasons: Harrell cards, premium application, ment and the citing authority agent, and as such lacked to check to Celtic. Celtic then sent an insur- Celtic; second, jury’s to bind and answer Harrell, policy who it delivered the third was submitted —which Coats. objection over Coats’ that Har- —establishes authority acting rell outside of his was During following August, Coats’ son agent. reject arguments. both Celtic’s Hospital was admitted to Shоal Creek psychiatric care. Coats filed a claim for his life, health, In the contexts of and treatment; despite son’s but Harrell’s contin- insurance, the Texas Insurance accident psychiat- in-hospital ued assurances that the recording Code makes no distinction between ric treatment covered the million $1 May agents soliciting agents. and See limit, $10,000 hospitalization paid Celtic America, 844 United Serv. Ass’n S.W.2d $27,000 expenses. medical (Tex.1992) 666, (discussing 669 n. 8 TexJns. 20). Rather, § agents are Code art. seeking Coats filed this suit relief under generally: defined section 21.02 of the Code article 21.21 of the Texas Insurance Code performed ordinary lists acts in the various and the Texas Trade Practiees- insurance,3 providing and states course of (DTPA), Consumer Protection Act TexJBus. & any person performs acts that who these hearing 17.41-.63. After the ev- Com.Code company “shall be held to be the idence, jury following findings: made the done, taken, is or the risk is for which the act (1) misrepresentations Harrell con- liabilities, duties, re as far as relates to all terms, benefits, cerning provisions, penalties forth in this quirements and set or conditions of the insurancе chapter.” cause of such as to be Coats, dispute per no but not do so There is Harrell he did formed, behalf,
knowingly; on at least some Celtic’s Thus, under the acts listed in section 21.02. (2) authority explain, on Harrell had clearly provision, Harrell was Celtic’s behalf, in- Celtic’s the benefits of the agent. policy; surance generally An insurance authority have the Harrell did not agent that is an liable for misconduct (cid:127) to make con- Celtic scope of the apparent within the actual or terms, cerning policy’s insurance See, Royal agent’s authority. e.g., Globe benefits, provisions, or conditions Consultants, 693- v. Bar Co. scope of which were outside the (Tex.1979); Lodge Free and Ac 94 Grand written document. Walker, 110 cepted S.W.2d Masons writ); $17,000 fairly (Tex.Civ.Aрp. no see jury also found that would 949 —Dallas al., George et reasonably compensate generally for his J. Couch Coats Couch on (rev. 26A:265, ed. § 2d at 506 damages.2 INSURANCE company; transmitting figure apparently represents ex- 2. This care, $10,000 penses receiving, minus the company; insurance to or from the actually covered. Celtic does not transmitting premium; collecting this measure adjusting of an insurance a loss on behalf company. include, among things, other 3. The acts listed soliciting insurance on behalf of an insurance 1984). jury specifically found to This rule on notions of fair task the is based —a principal authority. ness: “since has selected of Harrell’s be within princi liability to act a venture which the escape on the Celtic cannot intеrested, fair, pal it is as between him rep- particular it not authorize basis that did upon person, impose and a third him the concerning resentations agent may risk that the exceed his instruc Globe, Royal at tions.” III. FTC, (quoting Distributors v. Standard that Harrell is not entitled to Celtic asserts (2d Cir.1954) J.)). (Hand, F.2d the DTPA because there has recover under In the asked Har- showing been no that Coats relied on аuthority explain, whether Harrell had representations. rell’s The trial court re- *4 behalf, Celtic’s the benefits of the insurance requested fused Celtic’s issue on reliance policy. accompanying The instructions objected after Coats on the basis of Weitzel question “authority” explained that of an in- (Tex.1985). Barnes, 691 598 S.W.2d agent apparent; surance can be aсtual or defining apparent authority, in instruc- the Weitzel, legisla- In we determined that the explained, among things, tions other that rejected specifically ture had reliance as an company may “[a]n insurance so clothe the recovery the DTPA. 691 element of under agent signs authority with indications of chose, legislature at The in- S.W.2d reasonably prudent person so as to lead a to stead, recovery proof to when there is allow agent actually believe that the has such au- deceptive practice “pro- of a that act is thority.” question The answered the ducing cause” of the consumer’s actual dam- affirmatively. ages. (discussing Id. Tex.Bus. & Com.Code 17.50(a)). § does not
Celtic contend that Harrell’s representations were so absurd that no rea case, present In the the trial court person sonable could have believed Harrell question asking submitted a whether Harrell acting scope authority.4 was within the of his any misrepresentations that were a Nor does Celtic assert other “producing damages” cause of to Coats. jury’s finding authority the that Coats had hold, fairly presented question, This explain policy. under common-law jury. issue of cause to the We agency, repre rules of Celtic liable for the decline Celtic’s invitation to overrule Weitzel. explaining sentations Harrell made IV. liability by Celtic’s is not affected argues trebling Finally, that the of Celtic finding authority that Harrell lacked of the damages actual erroneous view was scope make outside the of jury’s finding misrеpresenta- that Harrell’s determining In written document. “knowingly.” tions not made Celtic were principal’s liability, proper vicarious 1979, points the DTPA has out that since principal is not whether the autho required that conduct be committed know- act; specific wrongful if rized the that were ingly damages may before be trebled. case, principals Tex. would seldom liable 17.50(b)(1). Additionally, § Rather, agents’ for their misconduct. Bus. & Com.Code 4, 1985, April article amendment effective proper inquiry is whether the in- 21.21 the Texas Insurance Code has of acting agency of the rela within requirement knowing con- cluded a tionship committing time similar at the the act. Schiff, damages may be trebled. Tex. Lakin Martin duct before See Leonard The 16(b)(1). Agency (1984). § argues misrep Ins.Code art. 21.21 Cеltic 144-45 Law of present in the in that cause of action did not accrue resentation case was made 1985, August his were explaining the course of the terms of the until when benefits Co., 549, absurd”); Farley interpretation “patently gener- see v. United Pac. Ins. 269 Or. Cf. 1003, (1974) (agent's representa- Appleman ally 1007 Appleman, 525 P.2d Insur- John Alan and Jean (1981). authority interpret 9168 tive had contract unless and Practice ance Law 100
denied,
ion,
required
separately
knowing
that
conduct is
but write
to note that
so
trebling
authority
explain
under either article
mere
21.21 or the DTPA.
terms of a
does not render an insurer
agent’s representations.
liable for all of
gen
agree.
A cause of action
lia
Several states have limited
insurer’s
erally accrues at the time when fаcts come
bility
interpretations
that are
into existence that authorize a claimant to
plausible
patently
or not
absurd. See Mutu
judicial remedy. Murray
seek a
v. San Ja
Bailey,
al
Ins. Co. v.
55 Del.
Life
Benefits
(Tex.
Inc.,
826,
Agency,
cinto
828
S.W.2d
215,
(1963) (noting that an
conclude
responsible for
We conclude that Celtic is
policy’s
agent’s explanation of the
where the
agent’s misrepresentations.
modify
its
absurd,
coverage
patently
which neces-
is not
appeals’ judgment
reflect an
sarily
in the insured’s reliance on
results
damages, rather than
award of
actual
See,
being reasonable.
agent’s explanation
attorney’s
damages;
and because
trebled
Madelia,
Agency
e.g., Lewis v. Citizens
basis,
percentage
we
fees were awarded on
Inc.,
306 Minn.
235 N.W.2d
attorney’s
modify the award of
fees.
also
misrеpresen-
agent
(finding
where
respects,
judgment of the court
all other
type
amount of cover-
ted to widow the
is affirmed.
agent’s
age
relied on the
on a
and she
Public
expertise); Crawley v. American
Life
ENOCH, Justice, concurring.
(Miss.1992)
Co.,
(estopping
I concur in the of the Court and join policy. Our decision does not conflict with opinion, goes. its so far as it As the clear, this rule. We do not hold contractual- holding Court makes our that an insur- ly misrepresenta- poli- er is liable for the liable because its modified the tortious soliciting rather, cy; vicariously tions of its we hold Celtic liable agent’s authority course of the is consistent under Insurance Code and the agency principles ap- with fundamental Trade Practices Act tortious plied jurisdictions. in most other On rehear- misrepresentation. however, Celtic, ing, along with amicus curi- Jackson contends that this is a distinction ae Jackson National Compa- Life Insurance Imрosing liability without a difference. ny, complains that our decision cannot be misrepresentations, Celtic for ac Harrell’s specific language reconciled with the of arti- *6 Jackson, cording allowing is tantamount cles 21.02 and 21.04 of the Texas Insurance agent modify disagree. I Code. Because I believe the Court should Although in this ease Coats recovered contentions, have addressed these I write expense of if his son’s treatment as it had separately. policy, been covered under the he was able to provides part Article 21.02 in as follows: do so because the found that Har Any person who solicits insurance on rell’s conduct awas cause of such behalf of company ... shall damages. finding That is not before us for be held to be for review, as Celtic does not the mea done, taken, which the act is or the risk is sure of But Coats did not obtain liabilities, duties, far as as relates to all the policy covering psychiatric treatment ex requirements penalties set forth $10,000, misrepresenta cess of and Harrell's chapter. This article does not autho- not, alone, standing tions did make Celtic orally, writing, rize an or during liable for treatments non-covered alter, amend, waive, modify, otherwise or policy period.1 change a term or condition an insur- application ance or an insur- for holding merely Our an extension of the policy.... Royal Court’s decision in Globe Co. added). (emphasis (Tex.
TexJns. Code art. 21.02 Consultants, Bar similarly provides Article 21.04 1979). as follows: There, recognized that article Any person soliciting agent who 21.02 not authorize a solicits an does life, accident, insurance, contrary for or to those health bind insurer terms insurance, shall, property casualty in of sources, damages produced by misrepre- poli-
1. The extent of the difference in value between the concerning cy represented аctually sentation deliv- as ered, might depend repre- expenses on such when the and whether the insured incurred factors as made, represented sentation was coverage whether the that otherwise would not have been incurred representation. was in fact available from other based on the policy,2 the written but we nevertheless held escaрe liability insurer
that the could agents’ misrepresentations that violate ar
ticle 21.21 of the Texas Insurance Code or Trade Prac
section 17.46 of the
tices Act. Black, Dallas, petitioner.
Don Hill, Dallas, respondent. Donald W. PER CURIAM. presents case of whether
This jurisdiction appeals has to hear appeals, holding appeal. LINWOOD, Petitioner, Algie not, jurisdic- that it did dismissed for want argument ma- hearing oral tion. Without jority of the court reverses TEXAS, Respondent. NCNB court of and remands to No. 94-0364. Tex.R.App.P. proceedings. for further court Supreme Court of Tеxas. Texas, as- Algie Linwood sued NCNB of 13, 1994.
Oct. serting arising out of contract and tort claims repossession of trucks. The trial two granted summary judgment in favor of court September 1991. Linwood NCNB requested findings and conclusions of of fact September 26. He filed his notice of law on appeal past-due on October 3 and a notice findings of law on of fact and conclusions 15, аfter the trial October 22. On November findings produce of fact and court failed to *7 days fifty-three after conclusions of law and signed, summary judgment Linwood appeals his cost filed bond. it jurisdiction because dismissed for want findings request for held that Linwood’s conclusions of law did not extend fact and summary judgment timetable in a appellate appeal was not and Linwood’s notiсe of case the court’s attempt a bona fide invoke Consequently, jurisdiction. 393. appeal concluded timely perfected. filing that extends Absent a deadline, thirty days from the party has signed to file his cost date Tex.R.App.P. perfect appeal. his bond to Legisla- modify policy recognized terms was added limitation even 2. The Court express- Leg., though did not ch. at that time article 21.02 See Acts 69th ture language expressly ly provide. so May eff. soliciting agent's authority limiting to alter or