Progressive County Mutual Insurance Co. v. Boman
780 S.W.2d 436
Tex. App.
1989
Check Treatment

*1 uninterrupted money of tax flow review, pending judicial

district and at the taxpay-

same time avoid a forfeiture of the right

er’s to review because of a technical

violation.

The summary Review Board’s motion for

judgment pointed out Wildwood’s failure to

literally 42.08(b), comply with Section

thus constituted a sufficient motion for de- compliance

termination of under Section

42.08(c). stated,

For the reasons

reversed. The cause remanded to the proceedings

trial court for further consist- opinion.

ent with this

PROGRESSIVE COUNTY MUTUAL COMPANY,

INSURANCE

Appellant, Lynn Bridgewater-

Dale BOMAN and Associates,

Calvin Insurance

Inc., Appellees.

No. 9659. Texas, Appeals

Court of

Texarkana.

Oct. 1989.

Rehearing Granted Nov.

437 findings that to in Progressive engaged deceptive trade prac- unfair claims settlement practices and that insufficient evi- tices. We determine dence exists reverse. relevant, an officer

At Boman was times. motorcyclist in the solo division Thayer, Barry Flynn Mark W. G. & Asso- police department. In connection Houston ciates, Houston, appellant. for work, equipped he with that owned Rose, Spradlin, Spradlin, Mulloy, James R. Goldwing motorcycle, Honda which 1984 Jr., Spradlin, Rogers, Best & Donald W. compa- by another insurance was insured Houston, Lynn for Dale Boman. motorcycle regular for ny. He used this Houston, Fox, Eidman, Prappas Thomas & escorting other ve- police business and for Associates, Inc. Bridgewater for Calvin Ins. extra through hicles traffic. He earned work, money he con- in the escort which BLEIL, Justice. job. sidered to be a second appeal in This is an an action based In that he needed anoth- 1986 he decided Act, Deceptive Trade Practices Tex. on motorcycle police er to use for his work. (Ver seq. Ann. Bus. & Com.Code 17.41 et § August purchased In middle of he 1987), non and the Unfair Claims Settle Goldwing. pur- a 1986 Honda In order to Act, ment Ann. art. Practices Tex.Ins.Code motorcycle, chase the Boman borrowed (Vernon 1981), arising 21.21-2 out of Pro money from the Houston Police Federal gressive County Compa Mutual Insurance Union, required Boman to ob- Credit which ny’s denial of Dale Boman’s claim for dam coverage full on the motor- tain insurance ages motorcycle, to his he made applied cycle. August 18 Boman for On upon based an insurance issued through Bridgewater-Calvin. insurance Progressive. Progressive sued Associates, Bridgewater-Calvin Insurance spoke Lila Specifically, he saw and Inc., agency. the insurance Boman did not Musterman, explaining that he full wanted agree file suit to recover on the insurance motorcycle. on the new She ment, proceeded that but get full formed him that he could not cover- claim, pay and the continued age motorcycle if it was used as a pay refusal malicious constituted motorcycle. Progressive did not in- Deceptive Practices violation of Trade pur- motorcycles sure used for business Act and the Unfair Claims Settlement Prac understood poses. Boman and Musterman tices Act.1 cross-claimed using motorcycle then that he was not indemnity. for purposes bagan and that if he for business court, In a trial before the obtained pur- for to use the business $9,661.00 judgment against Progressive for coverage from poses, he would not have $28,983.00, damages, in actual trebled to Progressive. applied, he he indi- When $25,- punitive damages, in not to cated in The 000.00 fees. top At used in business. totally Bridgewater-Calvin. absolved typed printed application form was these (sic) Police Patrol- ap- “Bowman is a presented critical issues on this words: The Goldwing man, he has an 84 Honda peal are whether sufficient evidence exists but curiam, per 723 S.W.2d 668 Act writ (Tex.1987); n.r.e. 1. The Unfair Claims Settlement Practices ref’d 21.21-2, Ann. art. purport give private Tex. Ins. Code individuals a does not 1981). Rather, (Vernon the trial court Even if §§ authorizes the State 6 cause of action. recovery part upon allowing based investigate impose erred in Board of Insurance article, point before us on practices. that is neither this sanctions for unfair claims germane appeal to our decision Casualty Ins. nor Cantu v. Western Fire & 1986), support the (Tex.App. Corpus evidence is insufficient S.W.2d Christi — not insure would formed Motorcycle that he uses busi- 1200CC only.” time. pleasure This one is used for it at ness. page Progressive’s motor- On the first 22, 1986, sent Musterman September form, immedi- insurance Bridgewater-Calvin to a letter on behalf *3 following legal description of the ately the previously she had Progressive, saying that

vehicle, following is the notation: motorcycle insur- for application mailed an Cycle kept Garage in a or that Bo-

NOTE: Is this Boman. She said ance for Dale Carport your in a at Residence? the cover- Chained called and did not want man had (If No-Risk is policy the because _Yes _No age, that he did not need Eligible.) Not signature a loan. She he had taken out insurance request the for an asked that page of the the of the second On bottom applica- the disregarded and that policy be application, provides applicant the it in Apparently not mailed tion be back. read, sign, that failure must initial and request, Progres- response to Musterman’s in cancellation. There to do so will result Boman, Bridgewater- sive sent a notice reads, “My cycle kept is a certificate that Calvin, Police Federal and the Houston garage to the structure of a in a or chained 1986, 23, September in- on Credit Union that cer- carport my at residence.” After policy was to be forming them that the application end tificate and at the 5, This October 1986. canceled effective signature “Dale L. Bo- appears form 18, that Bo- was sent on August cancellation man.” The is dated Progres- 1986, satisfactorily not assure in How- man did and was admitted evidence. garaged ever, motorcycle would be he did not re- sive that the Boman testified that although carport. signing application, chained to the member or Because he looked like his. 2, 1986, Boman was en while On October signing he said that could not remember funeral police a escort for a route to act as signature. paid his it was not pickup a collision with a procession, he had giving policy by first installment on the a The collision occurred when truck. Bridgewater-Calvin for on check to $166.00 the truck attempted pass the truck and August Boman was left in front of him. turned Meanwhile, prepare steps Boman took motorcycle demolished. injured and the motorcycle for use as a evi- determining In whether sufficient repainted, August 12 he had it vehicle. findings, it supports the trial court’s dence bought light mountings fog pursuit or for key findings upon helpful to detail the lights lights, bought police-type for the its the trial court based knew that motorcycle. Because Boman that Boman sustained The trial court found began using as a he when damage injuries person and to his to his only insur- police vehicle for business 2, 1986, cover- while motorcycle on October probably get be liabili- ance he could would issued Pro- policy of insurance ed by a ty he could not be covered and that that Bo- gressive. The court determined Progressive, and further be- policy from required in excess of injuries man’s the credit union cause he knew limit under the medical care —the quired him to have full insurance by the protection afforded personal injury change motorcycle, he determined to damage property less —and Thus, September the nature of his loan. Thus, $7,161.00. the deductible the credit union Boman went damages to be found total actual trial court loan, obtained a applied for a $9,661.00. the collateral from his earlier release of liability deceptive respect note, loan, signed which was With a new and unfair claims settle- practices trade his friends. guaranteed by certain of court found the the trial time, Bridgewa- practices, ment Boman notified About that Progres- the loss following matters: after using the that he had started ter-Calvin the event “for business, about sive took a statement motorcycle for and he s initially denied Boman Progressive seeking out a de- purpose (1) policy required fense, entering claim because purpose and not for the use, kept in good negotiations,” when not into structure; carport general prac- garage or chained to a and that this was business Progressive; Progressive (2) comply requirement en- tice of with this void; gaged in an unconscionable course of ac- Bo- null and made grossly advantage unfair kept garage tion and took in a nor man neither refusing property rather, Boman in to honor his kept he it in carport; chained to a damage claim. The trial court further parking apartment. lot of his Subse- found that committed the suit in quently, answered practice” “bad faith claims because knew claiming use of part by that the business *4 rea- or should have known that it had no cycle a noncovered use because the was claim; deny to and that sonable basis use of the application was for recreational Progressive’s practice bad claims cycle only that Boman knew he would and (sic) maliciously, calliously “was done and for use of the not be covered with conscious indifference and reckless Progressive’s work. To better consider disregard rights” of Boman. claim, denying mental state in it is pertaining to appropriate to look at the law $40,000.00 proceeded The court to find comply a failure with a certification such damages attorney’s punitive policy application. as the one in the trial, provisions fees for with for lesser stages amounts of fees for the Ordinarily, five elements must be appellate process. in the The court further pled proved may before an insurer par- found that did not payment avoid on an insurance be ticipate deny in the decision to Boman’s misrepresentations applica cause of on an misrepresent anything. claim and did not (1) representation by tion for insurance: turn We now to a consideration of wheth- insured, (2) falsity representa of the er there is sufficient evidence to tion, insurer, (4) (3) reliance thereon the court’s which establish the ba- insured, by the intent to deceive consideration, sis for the In this materiality representation. Mayes weigh we consider and all the evidence in Co., Massachusetts Mut. Ins. 608 Life determining whether the evidence is suffi- 612, (Tex.1980); Sharp 616 v. Lin S.W.2d Estate, 662, cient. King’s In re 150 Tex. Co., 752 S.W.2d coln American Ins. Life And, (1951). 244 S.W.2d 660 when we (Tex.App. Corpus 675 Christi — verse a because the evidence is element, denied). writ The fifth the mate insufficient to we detail the rele- riality representation, has con been point vant evidence and out the basis for materiality repre strued to mean our determination that the evidence is sentation to the insurer’s decision to issue Co., sufficient. Pool v. Ford Motor 715 policy, Robinson v. Reliable Ins. Life (Tex.1986). S.W.2d 629 Co., (Tex.1978),citing Tex. 569 S.W.2d (Vernon 1981), already We have detailed much of the Ins.Code Ann. art. 21.16 as opposed suspension the trial court. a later evidence before We now misrepre might sup- the evidence of a contract entered into without scrutinize change a later of circum port findings Progressive’s improper mo- sentations when Boman; representation taking stances causes a to become tive in a- statement from untrue, taking causing the insured to fall out course of action thus unconscionable Boman; of the contract. grossly advantage compliance unrea- of with term unfair situation, claim; change in circum denying acting mali- In that sonably the risk that indif- stance must be material to ciously, callously, and with conscious insurer actually the loss before the disregard reckless to Boman’s caused ference and deny coverage. Puckett v. Fire rights. looking at the evi- can U.S. Before (Tex.1984). A however, dence, at Pro- 678 S.W.2d it is best to look Ins. in warranty a statement made gressive’s its of the claim. bases for denial disregard to conscious and reckless susceptible of no construction with sured that is parties mutually rights intend of Boman. other than that binding ed that the should not be argues that there is evidence that literally true. unless the statement forged, showing thus application Company, Indemnity Lane v. Travelers application form clear evil intent. On (Tex.1965). Bridgewater- 391 S.W.2d 399 applicant places where the there were two might reasonably have Calvin believed coverage. sign concerning required to it that Boman made certain warranties to reject One was to uninsured/underinsured things, that his he would do certain reject coverage; the other was to motorists comply warranties with the Although personal injury protection. Bo- void. caused signed in those two man’s name was in a indicate that These authorities blanks, signed them he denied that he had policy, suit to on the recover handwriting and the different from the legally per conceivably would have a application on the which looked (1) that the suasive defense on two bases: handwriting. essentially like his misrepresenta of a policy was void because application said regard tion on the his, like that he did not remem- looked but *5 stored; would be where signing any application, and for that ber by although initially that covered he denied that was reason regard policy, when the circumstances with statement, Accepting there never- his. this representation to the that the that either defendant theless is no evidence purposes not to used for business was Furthermore, forged signature. noth- began materially changed, i.e. when Boman ing concerning the business, coverage to use the recovery forms a for the allowed. not a suit to ceased. Because this was Progres further maintains that Progressive could not policy, recover on the committed an unfair claims settlement sive successfully the suit on these defend from him after because it took a statement However, grounds. ample there is evi solely to establish a the accident to demonstrate that Pro dence before us good faith defense and not to enter into gressive’s appears denial of Boman’s claim negotiations. Although the tri settlement espe is patently to be reasonable. This fact, a al court found this to be evi cially when all of the circumstances so support a is insufficient to such find dence Progressive at the time the claim known to legal problems ing. Additionally, there are considered, including the denied are was position. A cause of action Boman’s of a belief that the reasonableness duty good of faith exists for breach of the void, request that he not be was Boman’s deny a there is no reasonable basis to when policy, and the any covered more processing. delay its Lee claim or that, a because the reasonableness of belief Safe (Tex. Co., 737 S.W.2d 84 mate Ins. of during occurred a business use accident Life Here, dism’d).2 App. Paso writ motorcycle, policy would not cover — El deny there was a reasonable basis the claim arose. out of which event 21.21-2, 2(d) as Article sets forth claim. Thus, § is not sufficient to show the evidence attempting in practice: “Not prohibited mental state which had a fair, prompt, unconscionable, to effectuate good faith one of bad could be labeled malicious, callous, of claims submitted equitable or settlements that was faith or one only recovery the alternative 2. At first allowed under appears a conflict was blush there to be duty Cantu, grounds. common law of holding Breach of the this and that of between However, dealing good actionable. Ar and fair is faith there is none. In both S.W.2d 737. County Fire Ins. Mutual does nold v. National noted that Article 21.21-2 cases the court (Tex.1987). plead upon the Based give private action S.W.2d 165 ings an cause of not individual fact, latter, findings it does although trial court’s against re and the In the an insurer. sought recovery or allowed appear sought not covery under Article 21.21-2 and good duty of the common law nonstatutory ac for violation of alternatively cause of for the dealing. dealing, good faith and fair faith and fair for breach of tion and erred reasonably part firmed that liability in which has become failing to do so. or in the Nothing provision clear.” in this pur Practice Act Unfair Claims Settlement complains Bridgewater-Calvin action ports to make an insurer’s conduct Progressive’s have ruled that we should “good not enter into able when it does agree against it. We only point of error liability negotiations” unless its issue. address this and now reasonably clear. is complaint only Progressive’s appeal, wholly We conclude evidence it judgment that against trial court’s any insufficient to establish nothing take judg- the trial court which law, that, it was enti- a matter as conclude that the ment entered. Since we indemnity. There is evidence tled to judg- is insufficient to evidence failure to find supports the trial court’s ment, the cause must be reversed and re- indemnity. Progressive is entitled to Thus, trial. the issues manded for Indeed, out pointed has not relating to the reasonableness of any establish that evidence which would Progressive’s right indemnity fees and law, entitled, to be indem- as a matter of against Bridgewater-Calvin need not be Thus, by Bridgewater-Calvin. we nified However, appeal. pro- this reached on only claim of error Progressive’s overrule allowing recovery priety of of treble dam- regard. in this Deceptive Practices ages under the Trade Therefore, Bridgewater-Cal- grant we punitive damages Act and should be ad- as rehearing insofar vin’s motion for that, retrial, so in the dressed event judgment provides that need further resolution on matter will not nothing Boman take Progressive and both appeal. *6 judg- affirm the trial court’s we ment; judgment prevailing party aspects other A is not entitled to all to the trial court. damages treble under the De reversed and remanded recover both ceptive punitive Trade Practices Act and

damages wrongful acts. the same Hosp., v. Texarkana Memorial

Birchfield 747 S.W.2d (Tex.1987). Progressive

correctly urges dam that both treble damages

ages punitive should not have

been allowed. MYERS, Tony Appellant, judgment

We reverse remand the case to the trial court. Texas, Appellee. The STATE REHEARING ON MOTION FOR No. 6-88-036-CR. Bridgewater-Calvin Insurance Associ- Texas, Appeals of ates, legitimately complains of our re- Court Inc. Texarkana. take-nothing judgment versal of against it. Both Boman and Oct. against Bridgewater-Calvin. sought relief party as a Boman sued having him dam-

responsible for caused

ages; Progressive sought contribution and any court denied

indemnity. The trial Bridgewater-Calvin.

covery against the take- appeal

Boman did not from claims

nothing judgment against him on his thus,

against Bridgewater-Calvin af- final. We should have