Allstate Indem. Co. v. Forth
| Decision Date | 21 April 2006 |
| Docket Number | No. 05-0057.,05-0057. |
| Citation | 204 S.W.3d 795 |
| Parties | ALLSTATE INDEMNITY COMPANY, Petitioner, v. Pat FORTH, Individually and on Behalf of Others Similarly Situated, Respondent. |
| Court | Texas Supreme Court |
Roger Higgins, Thompson Coe Cousins and Irons, L.L.P., Dallas, Jeffrey P. Lennard, Sonnenschein Nath & Rosenthal LLP, Chicago, IL, for Petitioner.
G. Laird Morgan, Stephen Gardner, Law Office of Stephen Gardner, PC, John M. Phalen Jr., Daniel Sheehan & Associates, L.L.P., Dallas, for Respondent.
In this breach of contract suit, we consider whether an insured has standing to sue her insurance company for settling her medical bills in what the insured considered to be an arbitrary and unreasonable manner. In reversing the trial court and remanding the case for trial, the court of appeals concluded that the insured had standing even though the insured had no out-of-pocket expenses, and her health care providers had not, and now could not, collect any additional sum from her. 151 S.W.3d 732, 738. Because there are no allegations that the insured suffered damages or that the manner in which the insurance company settled the insured's medical expenses caused her any injury, we conclude that the trial court was correct to dismiss her suit, and accordingly we reverse the court of appeals' judgment.
Pat Forth's daughter required medical treatment in 1997 as the result of an auto accident. The personal-injury-protection (PIP) of Forth's Allstate auto insurance policy, covered "reasonable medical expenses incurred for necessary medical services." Allstate settled Forth's medical bills for less than the actual amount billed. Forth sued Allstate for injunctive and declaratory relief, alleging that it arbitrarily reduced her bills without using an independent and fair evaluation to determine what amount of her medical expenses were reasonable. According to Forth, Allstate routinely discounts medical expenses by comparing those charges to a third-party contractor's computerized database. Allstate then offers about eighty-five percent of the medical expenses reflected in that database for the same treatment or procedure. Forth did not claim that Allstate's conduct had caused her any damage.
In the trial court, Allstate filed a motion to dismiss, arguing that Forth lacked standing because she had no claim for damages, and Allstate had not caused her any actual injury. The trial court granted Allstate's motion, and the court of appeals affirmed in part and reversed in part, holding that Forth lacked standing to seek prospective relief because Allstate no longer insured her, but that she could seek retrospective relief for any injury suffered while she was a policy holder. The court concluded that if a fair and independent evaluation of the medical bills revealed that Allstate paid less than the full amount of Forth's "reasonable expenses," then Forth could claim injury because the terms of the insurance contract required that reasonable expenses be paid.
The court of appeals relied on Black v. American Bankers Insurance Co.1 and American Indemnity Co. v....
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