*1 ent, and the measure of pocket”
either the “out of or “benefit of bargain” theory way should in no be
read as exclusive.
Chief Phillips joins Justice in this
Concurring Opinion Rehearing. ux., Petitioners,
Melvin L. VAIL et FARM
TEXAS BUREAU MUTUAL COMPANY,
INSURANCE
Respondent.
No. C-4598.
Supreme Court of Texas.
May 1988.
Rehearing July Denied *2 Sanders, Sherman,
Roger D. Joe K. Kincaid, Longley Longley and Mark L. Maxwell, Austin, petitioners. for Davis, Jr., Touchstone, Sidney H. Ber- Johnston, Smith, Dallas, nays, Beall & respondent.
SPEARS, Justice. presents question This case of wheth- against er an insured has a cause of action an insurer for unfair claims settlement Deceptive under the Trade Prac- tices Act or the Texas Insurance Code. Maryanne Petitioners Vail in- Melvin policy sured their home under a respondent Texas Farm Bureau Mutual In- Company. surance The home was de- stroyed by during policy period, fire pay and Texas Farm refused claim. The Vails sued Texas Farm for the policy full amount of the and for Deceptive under the Trade Practices Act (DTPA), Tex.Bus. Ann. & Comm.Code 1987), seq. (Vernon 17.41 et and the Tex- Code, Tex.Ins.Code Ann. art. as Insurance alleging Supp.1988), a bad claim. faith failure to verdict, Based on a the trial court judgment rendered for the Vails for treble prejudgment in the amount of the amount, and attor terest trebled appeals ney’s fees. The court of reversed judgment part of the trial court’s that permitted actual trebled the policy limit as the Vails to recover damages, prejudgment actual interest on amount, attorney’s fees. S.W. 2d 692. We reverse judg appeals court of and render ment the Vails recover treble interest policy, prejudgment amount of the only, and attor policy on the amount of the ney’s fees. poli- purchased a fire insurance in 1978. Under the
cy from Texas Farm $25,000, insured for policy, the home was $10,000. insured for and the contents were July home on The Vails’ burned during agent (a), policy. term of the Sec. which acts were Farm Texas informed the Vails that the as defined 2(d) company “willingly” pay attempting would not Sec. claim, prompt, effectuate allegedly because the had not adequate settlements on claims sub- list of the contents mitted in which had destroyed in the become adequacy fire. The reasonably clear. however, bearing, contents list had no *3 Texas duty policy Farm’s under the proceeded The case on the basis of these on the home itself. Texas Farm notified statutory allegations and the claim Vails’ August 15, the Vails on 1979 that it had that Texas Farm had the com- breached denied the claims for both the home and duty faith fair mon-law and deal- the inadequate contents based on the con- ing. found Farm had that Texas tents list. intentionally failed to exercise processing the of the Vails’ claim re- engineering Texas Farm then hired an fusing promptly, fairly, to settle firm to investigation. conduct an arson equitably and after Texas Farm’s engineering firm concluded that no had become clear. Based on fire-setting present materials were on the jury findings, the trial court awarded receiving engineer- Vails’ site. After $35,000, policy the Vails the full limit of ing report, firm’s Texas Farm amount, trebled that and attor- awarded Fire State Marshal’s office to conduct a ney’s prejudgment fees and interest investigation. second arson An investiga- figure. trebled tor for the Fire Marshal’s office tested four appeals The court of reversed that samples sample of fire debris. One showed judgment of the trial court’s that trebled fire-setting no present. materials were the actual awarded the Vails. samples The other three pres- indicated the appeals The court of held that there is no fire-setting Expert ence materials. testi- private cause of action for unfair claims trial, mony however, indicated that the under the DTPA or samples three were tested under conditions appeals Insurance Code. The court of questions that raised to validity as per- modified the trial court’s results. Based on the Fire Marshal’s re- mit the Vails to recover the combined port, changed Texas Farm its basis for $35,000 policy limit of on the home and denying inadequate the claim from an con- contents, prejudgment interest on that tents list to arson. amount, attorney’s fees. Farm, seeking The Vails sued Texas re- they properly The Vails contend that covery damages, treble pleaded, proved, jury findings and obtained attorney’s fees based on unfair claims set- under the DTPA and the Insurance Code so alleged tlement viola- as to entitle them to recover treble dam- tions of the DTPA and the Insurance Code. ages. responds Texas Farm ar- with two lodged special Texas Farm exceptions to First, guments. Texas Farm asserts that pleadings, complaining the Vails’ of lack of adequately plead the Vails failed to viola- notice. The trial court struck all of the tions of the DTPA and the Insurance Code. DTPA allegations and Insurance Code with Second, argues Texas Farm that even the exception following: pleadings provided adequate notice of the alternative, In the Defendant violated claims, DTPA Code Comm.Code, Tex.Bus. Vails failed to state a cause of action under 17.50(a)(4)by employing using acts Texas law. which violate art. 21.21 of the Texas In- Code, regulations surance or rules and allege pleadings that Tex issued Board State of Insurance 17.50(a)(4) as Farm violated section 21.21, under said art. as follows: by engaging in DTPA acts that violate (b) By engaging practices contrary in the 21.21 of the Texas Insurance Code regulations promulgated pursu-
to Sec. 4 of Insurance Board Order or rules or 17.50(a)(4) ant to that article. Section Griffin, Star Ins. Co. v. Life provides: the DTPA (Tex.Civ.App. — Beaumont writ ref’d Texas Farm concludes A consumer maintain an action legislature, by enacting 21.- .article following where constitutes a 21-2, any private “sealed off” cause of producing damages: cause of actual practic action for unfair claims settlement DTPA and article ance Texas Farm Lawyers Title Ins. their claims under section ture has limited the state a cause of action tices. the Vails were Insurance Code. Tex.R.Civ.P. scribed tained in article 21.21-2 of the Insurance claims Board of Insurance to issue as Farm was App. engaged sist orders 17.50(a)(4) which article 21.21 relief DTPA, however, entirety. article 21.21 of the Code. of unfair or Co. v. incorporate “remedies” Tex.Bus. & Comm.Code Ann. § (Vernon 1987). Texas Farm contends that Texas Farm — El language Code, ance The use or ance under Art. of Art. son of an act pleadings provide adequate notice of Jewell, Tex.Ins.Code Ann. art. 21.21-2 Article 21.21-2 authorizes by 17.50(a)(4) amended, in unfair claims Paso See section 16 of article 21.21 of the upon finding the Vails nevertheless provision section 16 of article argues deceptive Mobile of section given adequate seeking maintains that even if the the State Board of Insur- by as amended. employment by any per- DTPA or rules and of the DTPA does not practices Texas Insurance its writ Insurance Code that defines the County acts or remedy for unfair relief under section terms, that an § under Texas law. the Texas ref 'd 17.50(a)(4) for conduct 17.50(a)(4)of the 16 of the Insur- cease and de- to that con- 910 Texas Insur- practices 47; Mutual Ins. incorporates be insurer has notice that regulations 21.21, (Tex.Civ. failed to Stone v. granted. violation legisla- State types (Ver- prac- Code, Tex pro its another’s by any person regulate (Vernon Supp.1988). rates section 16 of article surance Code. Section Bus. to be remedial insurance). 1987); Tex.H.B. 417 Before the House Committee (Feb. 27, 1973) (the DTPA was intended to apply to the insurance Melody Barnes, Code Ann. art. 1988) (the purpose of article 21.21 is to Consumer Protection Act: to the insurers from 1987); DTPA or the Insurance Code that Ins.Code 724 S.W.2d Supp.1988). ness of insurance includes the na Tex.Bus. & Comm.Code Ann. § practices in the (Vernon 1987); es under the DTPA or Insurance Code. grant relief [1] Section The DTPA and the Insurance Code each §§ Business and Casualty adjustment any of the liberally handling of Comm.Code Ann. DTPA and the Insurance Code are trade purposes 741 S.W.2d Home Ann. art. engaging in: 17.50(a)(4) for unfair or Deceptive Trade Practices— There is no or 21.21; & practices in the construed to who Tex.Ins.Code Ann. art. of claims and losses. Aet deceptive by 21.21, legislature Surety Manufacturing practices declared to be 771-72 Industry, of those statutes. insurance claims. See Supp. Ann. art. has been for conduct industry); § Co. 1 permits (Tex.1987); 1988). provision 21.21 of the In- 354 n. 7 DTPA (Vernon Supp. § has mandated 63rd of insurance. Hearings promote v. Section investigation 2(a) (Vernon injured by *4 Marshall, 17.50(a)(4) The busi recovery exempts Leg. incorpo- Texins. relating Co. acts or in the (Tex. 4 of Tex. Tex. 1(b) 21.- on 17 non 1981). It has been held, however, [2] conduct defined in rules or regula- lawfully adopted by the Board private tions not confer a article 21.21-2 does meth- article 21.21 as unfair injured by upon cause of action individuals de- competition and unfair or ods of practices. Lone unfair claims settlement ceptive acts or m the busi- competition, method of or that is an un- insurance; ness of or deceptive fair or practice act or as de- [3] any practice 46 of the Business & Commerce deceptive amended, trade defined as an unlawful by Section 17.- fined other rules and Board of Insurance Code of Texas or by provisions regulations as defined authorized of the Insurance of the State by these or by Code. 21.21, 16(a) Tex.Ins.Code Ann. (Ver- Supp.1988). non (b) contend that Irrespective of the fact that im- Texas Farm in the second and proper practice trade is not defined types third prohibited conduct by section any other section of these Rules and by engaging by declared Regulations, person no engage shall rule regulation or of the State Board of this state in practice trade which is Insurance to be unfair deceptive; or determined by law to be an engaging in acts that constitute an unlisted competition unfair method of or an un- deceptive under section 17.46 fair in the of the DTPA. We will address each of the business of insurance. separate theories advanced the Vails to Insurance, State Bd. of support their recovery of treble (now4 21.3) (Hart 28 Tex.Admin.Code under section of the DTPA and 1986) added). (emphasis Section 4 thus section 16 of article 21.21 of the Insurance permits an insured to against recover Code. insurer for unfair acts proof that the insured adversely has been Claims Settlement Practices As Unfair injured affected or by either Declared State Board of *5 that is unfair or by Insurance Regulations defined by Insurance Code or other rules or note, As the Vails section 16 of arti regulations promulgated by the State prohibits cle 21.21 an insurer engag from Insurance; (2) Board of deter ing practices in declared to be unfair or pursuant mined to law to be an unfair or deceptive by regulation a rule or deceptive practice in the insurance busi State Board of Insurance. allege The Vails ness. See Allstate Ins. Co. v. Kelly, 680 that Texas Farm engaged in de 595, 1984, 605 (Tex.App. Tyler— clared to be unfair or by State writ ref’d Board of 18663, Insurance Board Order regulation specifically adopted pursuant to 4(a) 1. Section Board Order 18663. article Insurance, 21.21. State Bd. of In order to establish a cause of action (now 28 Tex.Ad § 4(a) based on section of Board Order (Hart 1986)). min.Code § an insured must establish that the Insur- pleaded that Texas Farm in con regulation ance Code or a rule or by prohibited duct by section 4 of Board Order the State Board of Insurance defines which reads: practice or deceptive. act as unfair or The Sec. 4. UNFAIR TRADE PRACTICES 21.21-2, 2(d) Vails note that article PROHIBITED. prac- Code as an unfair defines (a) misrepresentation The of insurance tice: policies, competition, and unfair Not attempting good in faith to effectu- insurers, by agents and other fair, prompt, equitable ate settle- persons prohibited connected by Arti- ments of claims submitted in which liabil- cle 21.20 and Article by 21.21 or other ity reasonably has become clear.... provisions of the Insurance of Tex- Code 21.21-2, 2(d) (Ver-
as and
regulations
rules and
of Tex.Ins.Code Ann. art.
1981).
the State Board
non
per-
of Insurance. No
The Vails contend that
engage
son shall
in
any
incorporated
this state in
definition is
into Board Order
misrepresentation
that is a
provides
and thus
basis
their
of an
insurance
17.50(a)(4)
that is an unfair
cause of action under pleaded,
DTPA. The Vails
imposing
offered evi-
sanctions on an insurer for such
dence,
and obtained a
acts,
that the acts were committed “with-
Texas Farm
good
attempt
did not in
faith
Thus,
out cause” and
“frequency.”
with
to promptly
fairly
settle the Vails’
“frequency”
requisite
is not a
element of
liability
when Texas Farm’s
became
any of the acts defined in article 21.21-2 as
reasonably clear.
practices; rather,
unfair trade
“frequency”
prerequisite
is a
to the issuance of cease
Texas Farm maintains that
and desist orders
the Board.
Vails
por
not utilize
definitional
tion of article 21.21-2 because that article
pleaded
that Texas Farm
does
private
not confer a
cause of action
attempted
good
had not
in
faith to effectu
injured by
individuals
unfair claims
ate settlement of their claims after its lia
McKnight v. Ideal
clear,
bility
reasonably
became
Mutual
F.Supp.
in
prohibited
defined
article 21.21-2 and
(N.D.Tex.1982).
Vails, however,
do
By
Board Order 18663.
incorporating
not seek to recover under article 21.21-2
Board Order 18663 and the definition con
and,
fact,
concede
they
have no
2(d),
tained
article
the Vails
private cause of action under that article.
stated a cause of action
to section
allegations
The Vails’
are based on section
17.50(a)(4)
of the DTPA and article
17.50(a)(4)
of the DTPA and article
Further,
the Vails offered evidence
16 of the Insurance Code. The fact that
jury findings
and obtained
that Texas Farm
pri
21.21-2 itself does not confer a
(1)
attempt
did not
faith to effectu
preclude
vate cause of action does not
prompt,
ate a
incorporation of definitions contained in
clear;
once
had become
that article
regulations
into rules and
failed to
exercise
promulgated by the State Board of Insur
investigation
processing
of the claim.
ance.
Vails, therefore,
are entitled to recover
Texas
alternatively
Farm
asserts that
under section
of the DTPA.
permitted
even the Vails were
incorpo-
Alternatively,
attempt
the Vails
to estab-
rate an article 21.21-2 definition into Board
pur-
lish that
stated
a cause
action
the Vails must show “fre-
4(a)
suant to section
of Board Order 18663
quency” of
statutory
conduct to meet the
*6
on the
of
basis
the definition of unfair
argues
definition. Texas Farm
practices
claims settlement
contained in an-
prefatory language
21.21-2,
of article
2§
regulation
by
other
the State Board
(d)
defines subsection
as an “unfair claims
Insurance,
of
Board Order 41454. This
practice” only
settlement
if such acts are
argument
court considered a similar
in
performed
“committed
cause
without
and
Chitsey
Lloyds
Co.,
v. National
frequency
by
with such
as determined
(Tex.1987).
135 1982) (now 28 Tex.Admin.Code Claims Settlement 21.203 Practices Unfair (Hart 1986)) (emphasis added). Chitsey, Under Section the DTPA 17.46 of this court held that Board by prohibits Section 16 of article 21.21 also terms, express requires its proof of more engaging any practice an insurer from act. Chitsey, 738 S.W.2d at single than a by defined section 17.46 of the DTPA. Sec- Consequently, 643. the Vails not suc- tion 17.46 specific of the DTPA enumerates cessfully rely on the by definition “false, misleading, deceptive acts as or acts Board Order 41454 because that definition practices,” or but this enumeration does includes, element, a requisite “such fre- not constitute an exclusive list of acts that quency as general to indicate a prohibition against deceptive violate the practice.” An insurer’s denial of Williams, two Spradling v. trade claims single made insured does not 566 S.W.2d 564 Section any type “frequency” required encompasses constitute the 17.46 of business activity definition of an unfair claims Id. that deceives consumers. practice alleged, When an unlisted Board Order 41454. is plaintiff must obtain a 4(b) 2. Section Board Order 18663. act or occurred and that it was Id. at 564. deceptive. 4(b) Section of Board prohib Order 18663 its unfair trade that have been Article 16 of the Insurance Code determined pursuant to law to be an un makes any actionable violation of section fair deceptive Casualty DTPA. Aetna 17.46 of the While a Surety Marshall, jury finding Co. v. does not constitute “a determi S.W.2d law,” (Tex.1987). Thus, nation of empowered this court is section 16 of article incorporates 21.21 determine whether unlisted conduct constitutes an false, misleading, determined to be unfair or In Arnold v. Na act. Allstate deceptive. Kelly, Ins. Co. v. tional County Mutual Fire Ins. (Tex.App. Tyler 680 S.W.2d 165, 167 (Tex.1987), we held that as — writ ref’d between insured, an insurer and the there is duty of the insurer to deal The Vails assert the failure to at- fairly good and in faith in processing tempt to promptly, fairly, settle a claim In Aranda v. Insurance Co. claims. equitably liability when becomes reason- America, North 212-13 ably clear is an unlisted (1988), we held that an insurer breaches the practice under section the DTPA. duty dealing and fair The Vails further contend that ob- failing to promptly equitably pay jury finding tained a that Texas Farm had insured’s claim when becomes rea engaged in deceptive act because the sonably holdings clear. Our Arnold Special answered Issue No. as follows: Aranda determinations you preponderance Do find from a law that an insurer’s lack of faith in intentionally evidence that the defendant *7 processing a claim is an unfair or good failed to exercise faith in the inves- act. The Vails therefore stated a cause of tigation, processing, and denial of the practic action for unfair claims settlement claim made the basis of this lawsuit? 17.50(a)(4) es under section of the DTPA Answer: “We do.” 21.21, and article 16 of the Insurance § jury requisite The made the determina- through incorporation Code the of Board tion Texas Farm that had 18663, 4(b) holdings and the of this § when it found that court Arnold and Aranda. Texas Farm had failed to exercise pleaded proved and that Texas handling faith in the claim. Vails’ Farm failed to exercise the also found that Texas Farm’s processing of intentional, their claims. The Vails are although failure no was such thus entitled to recover finding expressly required by pre- under section 17.- the 50(a)(4) of the Compare DTPA. 1985 Tex.Ins. Insurance Code.
136 21.21, 16(b)(1) (Vernon damages Code Ann. art. sue “delay” resulting on from § Supp.1988) (requiring of practices, “know- unfair claims the ing” recovery conduct for of any treble dam- Vails are not entitled to under recovery ages). proved The Vails stated and the cause DTPA. 17.50(a)(4) action of of section the We hold an insurer’s unfair 21.21, DTPA and article 16 of the Insur- § refusal to insured’s claim the causes by pleading proving ance Code damages of as a matter law at least Texas Farm had committed an unlisted de- policy wrongfully amount of benefits ceptive under section 17.46 withheld. Casualty Surety Aetna Co. the DTPA. of Marshall, 770, (Tex. v. 771-72 We proved hold that the stated and Vails 1987); Royal Ins. Globe Co. v. Bar Con a cause of action for unfair claims settle- sultants, Inc., 688, (Tex. S.W.2d 577 694 ment under section of 1979); Kelly, Co. v. Allstate Ins. 680 S.W. DTPA of one three alternative 2d (Tex.App. Tyler 605 writ — (1) grounds: 21.21, incorporating article ref’d at The Vails suffered a loss Code, 4(a) 16 of the Insurance section of § the time of the fire for which were definition of an entitled to make a under the insur unfair claims settlement in article policy. ance not It was until Texas Farm 2(d) Code; (2) of the Insurance wrongfully the claim denied that the Vails’ 21.21, by incorporating article 16 of the legal damage. loss was transformed into a 4(b) Insurance of Board Or- is, minimum, damage That amount 18663, and der the determinations made policy proceeds wrongfully of withheld Arnold, Aranda; court in Texas Farm. by incorporating article 16 of the fact that the Vails have a breach Insurance Code 17.46 and section contract against action Texas Farm does
DTPA. preclude a cause action under DTPA and 21.21 of the Insurance Other Issues Code. DTPA and the Both the appeals specif- court of did not make provide statutory Code remedies holdings points ic other other Tex. cumulative of remedies. generally agreed error but with the conten- Bus. Ann. & Comm.Code tions Texas Farm. Because we reversed 1987); Ann. art. appeals the court of hold that the Vails (Vernon 1981); Baldwin, Smith a cause of for unfair stated action claims S.W.2d 614 n. It is well and are entitled to tre- persons settled that without insurance are DTPA, damages we ble under the will also represen- allowed to recover on false based parties’ points of error on address Sale, tations of coverage, Kennedy v. appeals specifi- the court did not (Tex.1985), S.W.2d 892-93 and that cally rule. damages insurer be liable First, insured or failure Texas Farm contends that for its refusal to settle third-party cannot the basis of Texas claims. G.A. Stowers Furni- recover on Co., 15 Indemnity conduct the home was de- ture Co. v. American Farm’s after (Tex.Comm’n stroyed by App.1929, fire because the Vails holding approved). incongru- in- It would under the be claimed recoverable paid premi- Texas Farm’s ous to bar an insured —who has surance contract. Under protection theory, policy under the ums and is under the the amount due entitled recovering damages solely represents policy when the breach *8 —from pay refuses to a wrongfully constitute insurer valid contract and does not actual damages claim. would be contra- in relation to claim of unfair Such a result purposes of the practices. Texas Farm vention of the remedial claims settlement the DTPA and the Insurance Code. Tex.Bus. argues that Vails did not because 1987); (Vernon evidence, jury & Comm.CodeAnn. plead, offer or submit is- however, hold, trial Ann. We do in prejudgment Supp.1988). improperly court awarded Prejudg on the trebled amount. terest pleaded proved that the Vails puni may not be awarded on ment interest $25,000 coverage on the home fire loss was damages. Quality Control tive Cavnar $10,000 policy the contents. Their on (Tex. Inc., 696 S.W.2d Parking, to the home itself was a “valued” as 1985). measure of one in which the the value insured was set the con property Third, that Texas Farm contends tract; thus, necessary it was not in the not entitled to recover under the Vails are prove total loss to actual case of the Vails’ comply the DTPA because failed damages. Casualty Houston Fire 17.50A, provi DTPA notice with section Nichols, (Tex. Co. v. Farm asserts that the Vails sion. Texas 1968). contents, As to the found dam failed to state the amount of actual $10,000 in dam the Vails sustained required as ages they allegedly sustained challenged ages Texas Farm has not purpose section 17.50A. The finding. The Vails offered evidence requirement DTPA notice is to inform wrongfully had that Texas Farm denied complaint and thus seller of the consumer’s $35,000 claim, resulting in a failure to provide opportunity parties for the $35,- due. The Vails when thus sustained litigation. settle the matter without North damages 000 as actual as a result of Texas Bauerle, 678 American Van Lines v. Farm’s unfair claims settlement (Tex.App—Fort Worth Second, Texas Farm contends that n.r.e.). The notice writ ref’d damages trebling the trial court was 17.50A, letter, sent to section discretionary unwarranted no dam- because stated: age presented pursuant sec- issue was officially This letter is to make demand 17.50(b)(1) tion of the 1979 version of the policy upon you payment for respond DTPA. The that the case Vails dwelling and the lost for the value of the was tried the 1977 version of the contents to the extent of the full cover- DTPA, mandatory for tre- age policy. bling damages. The therefore ar- made their claim for a total loss gue for that there was no need an issue speci- policy under a with Texas Farm inquiring whether Texas Farm had “know- $25,000 coverage fied the extent of ingly” violated the DTPA. $10,000 the contents. the home and the 1979 the 1977 or ver Whether to meet The notice therefore sufficient was dispositive applies sion of the DTPA is not 17.50A,and the requirements of section 17.50(a)(4), ap of this as it case. Section recovering precluded not from Vails are versions, pears in 1977 and 1979 both the by the trial awarded the trebled incorporates 21.21 of the Insurance court on this basis. 16(b)(1) of entirety. Code in its Section appeals is judgment of the court of article 21.21 the time this action arose is here ren- reversed provided: recover treble the dered that the Vails section, (b) In a filed under this suit interest policy, prejudgment amount of prevails may plaintiff who obtain only, and attor- policy on the amount of actual three times the amount ney’s fees. damages plus attor- court costs and ney’s fees.... GONZALEZ, J., dissenting. Thus, section of either because incorporates of the DTPA version PHILLIPS, C.J., sitting. not pleaded 16 of article 21.21 and the Vails GONZALEZ, Justice, dissenting. damages, presented evidence provid- legislature has awarding I dissent. tre- trial court was warranted of action for unfair private cause ed for to the Vails. bled *9 practices settlement under either the No engage insurer shall in unfair claim DTPA or the finding Insurance Code. In practices. Unfair claim set- action, such majority practices a cause of committing has tlement means had to reading performing resort to a tortured frequency of the with such as to DTPA, general Insurance and Vail’s indicate a business pleadings, any ignored following: and has of the opin- our recent .... in Chitsey ion Lloyds National (15) refusing con- claims without
claim settlement
found
Board Order 41454.
an act
provide
private
language
which did not
when faced with identical
defin-
cause of
ing
unfair
in article
action but
authorized
the State Board
so,
majority permits recovery.
To do
it
Insurance to issue cease and
or-
desist
employs what I believe is a false distinc-
ders
that an insurer has
tion, holding
“frequency”
req-
is not a
engaged in
practic-
unfair claim settlement
uisite element of the acts defined in article
es.
21.21-2
practic-
as unfair claim settlement
The majority is not satisfied to hold for
es.
just
theory
recovery.
Vail under
one
states,
pertinent part:
Article 21.21-2
apparent
Because of the
weakness and con-
insurer,
reasoning
majority’s opinion,
voluted
Any
following
acts
an
necessary
the court has found it
to “throw
per-
committed without cause and
everything including
frequency
the kitchen sink”
with such
as deter-
formed
opinion.
example,
plead-
its
For
Vail’s live
mined
Board
State
ings
allegations
Act,
are devoid of
that Tex-
in this
shall consti-
practices:
as Farm violated an unlisted
act
tute
claim settlement
However,
pretends
the court
integral part
this was
Vail’s
(d)
attempting
faith to effec-
Also,
pleadings.
majority’s opinion
prompt,
tuate
settle-
Chitsey.
contravenes our recent decision in
ments of claims
in which
submitted
liability has become
clear.
plaintiff sought
to state a
Chitsey, the
added).
(emphasis
cause of action
on the definition
Tex.Ins.Code art. 21.21-2
based
apparent
“frequency” may
in It is
unfair claim settlement
found
while
acts,
requisite
those
Board Order 41454.
ery. Id. impose
The court nevertheless seeks to *12 incorporating damages by the treble
treble
damages provision of article 21.21 of the Deceptive Trade
Insurance Code into the Act. This is untenable.
Practices a consumer to maintain an permits
DTPA
action where: following pro- constitutes a damages:
ducing cause of actual employment by per- the use practice in violation
son an act or Article Texas Insurance Code, as amended.... COM.CODE,
TEX.BUS. & added).
(emphasis ignores The court language by holding
plain that subsection
17.50(a)(4)“incorporated article 21.21 of the read- entirety.”
Insurance Code in its This
ing yields holding absurd result 17.50(a)(4)tre-
for violations of subsection mandatory, are because man-
ble
datory the Insurance while portions of all other
violations
DTPA, discretionary. treble
Plainly, Legislature intended to incor- stated, DTPA it
porate into the what in Tex. practices”
the “acts or enumerated
Ins.Code, pro- remedies not the under that statute.
vided for conclusion, for the support I find no damages in this
court’s of treble award Believing
suit. correct, I dissent. appeals was
court
CULVER, J., joins in this dissent.