American Liberty Ins. Co. v. Ranzau

• Decision Date: 07 June 1972
• Docket Number: No. B--3098,B--3098
• Citation: 481 S.W.2d 793
• Parties: AMERICAN LIBERTY INSURANCE COMPANY, Petitioner, v. Harold S. RANZAU et al., Respondent.
• Court: Texas Supreme Court

Page 793

481 S.W.2d 793

AMERICAN LIBERTY INSURANCE COMPANY, Petitioner, v. Harold S. RANZAU et al., Respondent.

No. B--3098.

Supreme Court of Texas.

June 7, 1972.

Rehearing Denied July 19, 1972.

Clemens, Knight, Weiss & Spencer, George H. Spencer, San Antonio, for petitioner.

Trueheart, McMillan, Russell & Hoffman, C. W. Trueheart, San Antonio, for respondent.

STEAKLEY, Justice.

The suit here was by the insureds, Harold S. Ranzau and his daughter, Paula, against their insurer, American Liberty Insurance Company. It concerns uninsured motorist coverage under the Texas standard family combination automobile liability policy in question. The policy insured two automobiles owned by Ranzau. Paula suffered personal injury damages of $50,000 while a passenger in a non-owned insured automobile, the injuries having been proximately caused by the negligence of an uninsured motorist. She has since reached her majority. The uninsured motorist coverage was limited to $10,000 for injury to one person. Two aspects of the problem are presented: whether the 'other insurance' clause in the policy, with the effect later shown, is valid; and whether, because of the coverage of two Ranzau automobiles, and the payment of a premium for uninsured motorist protection as to each, there is uninsured motorist protection of $20,000 for injury to one insured while riding in a non-owned automobile.

The parties agree that the statement of the case by the court of civil appeals is correct and we lift the following from the opinion. The 'Family Combination Automobile Policy,' issued by American Liberty Insurance Company consisted of the original policy and an endorsement. It insured two automobiles owned by Ranzau and contained uninsured motorist coverage required by the Insurance Code of Texas in the limits of $10,000 each person, $20,000 each accident. The premium attributable to this protection is shown by this entry on the face of the Endorsement:

'Uninsured Motorists 10/20 Limits 4.00

3.00'

The parties stipulated that Paula Ranzau was riding as a passenger in an automobile owned by Col. Victor Raphael; that such automobile was struck by an uninsured motorist whose negligence proximately caused the injuries to Paula Ranzau; that at the time of such collision, Col. Raphael had in force and effect a policy of insurance with United Services Automobile Association; and that Col. Raphael's insurer paid the Ranzaus $10,000 under the uninsured motorist coverage of his policy. The only testimony heard by the trial court related to the injuries of Paula Ranzau, who suffered severe disabling personal injuries. The trial court found that the Ranzaus had suffered actual damages in the sum of $50,000 and there is no complaint of this finding.

The trial court held invalid the 'other insurance' provision of the Ranzau policy, so that the prior recovery by the Ranzaus of $10,000 from the Raphael insurer was immaterial; also, that the Ranzau insureds could recover an additional $10,000, i.e., $20,000, from their insurer, American Liberty. The court of civil appeals agreed with the first holding of the trial court but disagreed with the second; it ruled that the Ranzau insureds were entitled to recover from their insurer only the uninsured motorist policy limit of $10,000 for injury to one person. Tex.Civ.App., 473 S.W.2d 249. Both the insured and the insurer filed writ applications. American Liberty Insurance Company attacks the holding that the 'other insurance' clause is invalid; the Ranzaus attack the holding that limits them to a recovery of $10,000 from their insurer, American Liberty. We affirm.

The 'other insurance' provision in the Ranzau policy is quoted in the margin. ¹ It is not questioned by the parties that its terms preclude a recovery in excess of the $10,000 paid the Ranzaus by the insurer of the non-owned automobile in which Paula was a passenger, and this is not before us. The question the parties have brought forward is whether such a device for limiting liability, insofar as insureds are concerned, contravenes the requirements of Art. 5.06--1, Insurance Code, Vernon's Annotated Texas Statutes:

'No automobile liability insurance * * * covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state unless coverage is provided therein or supplemental thereto, in the limits described in the Texas Motor Vehicle Safety-Responsibility Act, under provisions prescribed by the Board, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom. . . .'

Sec. 21 of Art. 6701h, the Safety Responsibility Law, provides in part:

'(b) Such owner's policy of liability insurance:

'1. Shall designate by explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby to be granted; and

'2. Shall pay on behalf of the insured named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, all sums which the insured shall become legally obligated to pay as damages arising out of the ownership, maintenance or use of such motor vehicle or motor vehicles within the United States of America or the Dominion of Canada, subject to limits exclusive of interest and costs, with respect to each such motor vehicle, as follows: 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, Twenty Thousand Dollars ($20,000) because of bodily injury to or death of two (2) or more persons in any one accident, and Five Thousand Dollars ($5,000) because of injury to or destruction of property of others in any one accident.'

American Liberty contends that the court of civil appeals was in error in holding invalid the 'other insurance' provision for two basic reasons: that Art. 5.06--1 of the Texas Insurance Code expressly authorizes the State Board of Insurance to subject policy limits of liability to reasonable regulations, and the Board has prescribed the 'other insurance' provisions consistent with the statutory requirements; and that it is the intent of the Texas plan of uninsured motorist insurance to provide only $10,000 insurance coverage for injury to one person.

The Ranzaus say in reply that the 'other insurance' provision conflicts with the requirements of Art. 5.06--1 which cannot be overridden by the Board of Insurance Commissioners; that Art. 5.06--1 merely fixes a minimum...