Black v. Victoria Lloyds Ins. Co.
| Decision Date | 12 September 1990 |
| Docket Number | No. C-8805,C-8805 |
| Citation | 797 S.W.2d 20 |
| Parties | Randal F. BLACK, C.O. Daniel and Lisa Jeanine Sudderth, Petitioners, v. VICTORIA LLOYDS INSURANCE COMPANY, Respondent. |
| Court | Texas Supreme Court |
This summary judgment case involves the issuance of an insurance "identification card" pursuant to article 6701h of the Revised Civil Statutes of Texas to a statutorily exempt "owner" whose liability insurance policy excluded coverage when the vehicle was not being used exclusively for business. After an accident which occurred while Lisa Jeanine Sudderth (Sudderth) was using the vehicle on a personal matter, Respondent Victoria Lloyds Insurance Company (Victoria Lloyds) denied coverage. Petitioners Randal F. Black (Black), C.O. Daniel (Daniel) and Sudderth filed suit and asserted several causes of action against Victoria Lloyds and others. Victoria Lloyds filed a motion for summary judgment asserting that there was no misrepresentation as a matter of law, that there was no insurance coverage for the accident and that Black and Sudderth had no standing. The trial court granted Victoria Lloyds' motion for summary judgment and rendered judgment against Black, Daniel and Sudderth. The court of appeals affirmed. 769 S.W.2d 949. For the reasons explained herein, we reverse the judgment of the court of appeals and remand the cause to the trial court for further proceedings.
The issues before this court are (1) whether there are genuine issues of material fact concerning misrepresentation of the liability insurance coverage for personal use which preclude summary judgment, (2) whether there are genuine issues of material fact concerning waiver of the policy's permissive personal use exclusion which preclude summary judgment and (3) whether Victoria Lloyds' motion for summary judgment failed to address all of the asserted causes of action.
In 1982, Daniel and Statewide Trucking, Inc. d/b/a Wood Brothers Transfer, Inc. (Wood Brothers) entered into a "lease" arrangement in which Daniel "leased" his pickup truck to Wood Brothers for Daniel's use in conducting Wood Brothers' business. Wood Brothers purchased a policy of liability insurance from Victoria Lloyds which met the requirements of article 911b of the Revised Civil Statutes of Texas for Daniel's truck. The policy excluded coverage "while the automobile is not being used exclusively in the business of the named insured and over a route the named insured is authorized to serve by federal or public authority...." Wood Brothers deducted the amount of the insurance premiums for Daniel's pickup truck from Daniel's pay checks. Daniel did not request or receive a copy of Wood Brothers' insurance policy prior to the accident.
After proof was furnished to the Texas Railroad Commission that Wood Brothers carried the minimum liability insurance required by article 911b, the Railroad Commission issued a motor carrier permit or certificate to Wood Brothers. 1 The permit or certificate, known as a "cab card," was delivered to Daniel to be carried in his pickup truck as proof of compliance with article 911b.
Pursuant to article 6701h of the Revised Civil Statutes of Texas, Victoria Lloyds issued insurance cards to Wood Brothers for distribution to all of its drivers including the drivers of its "leased" vehicles. Daniel received a Victoria Lloyds' insurance card 2 from Wood Brothers. This insurance card was a separate and distinct card which was also to be carried in Daniel's pickup truck. There is no indication in the insurance card that Daniel does not have liability insurance coverage for personal use of his pickup truck. The insurance card does not state that the coverage was limited to the use of the vehicle for business purposes only. In addition to the deduction of the premiums for insurance required by article 911b, Wood Brothers also deducted the amount of insurance premiums for medical and hospitalization insurance for Daniel and his family and for worker's compensation insurance for Daniel and other drivers of his pickup truck. However, since Wood Brothers did not purchase a policy of collision insurance which would cover Daniel's pickup truck, Daniel purchased a collision insurance policy from another source.
In October, 1982, Sudderth, Daniel's daughter, was involved in an accident with Black while driving her father's pickup truck on a personal matter. After Victoria Lloyds denied coverage, Black sued Sudderth, Daniel, Wood Brothers and Victoria Lloyds. After realignment of the parties and severance of a portion of the lawsuit, 3 Black, Sudderth and Daniel asserted causes of action against Victoria Lloyds for breach of contract, violations of the Texas Deceptive Trade Practices--Consumer Protection Act (DTPA) and section 21.21 of the Texas Insurance Code (), negligence, gross negligence, fraud and breach of duty of good faith and fair dealing. Victoria Lloyds filed a motion for summary judgment asserting that there was no misrepresentation as a matter of law, that there was no insurance coverage for the accident and that Black and Sudderth had no standing. The trial court granted the motion for summary judgment. The court of appeals affirmed, holding that issuance of the insurance card cannot constitute a misrepresentation as a matter of law, that Sudderth and Black could not claim "persons injured" status under section 16 of article 21.21 of the Insurance Code, that there was no insurance coverage on the occasion in question and that there was no negligence or bad faith.
Black, Sudderth and Daniel argue that there are genuine issues of material fact concerning misrepresentation of the liability insurance coverage for personal use which preclude summary judgment. We agree.
The standards for reviewing a motion for summary judgment are well established. The movant has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986). In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Continental Casing Corp. v. Samedan Oil Corp., 751 S.W.2d 499, 501 (Tex.1988).
Article 6701h requires that no motor vehicle may be operated in Texas "unless a policy of automobile liability insurance in at least the minimum amounts to provide evidence of financial responsibility ... is in effect...." TEX.REV.CIV.STAT.ANN. art. 6701h, § 1A (Vernon Supp.1990). "[E]very owner and/or operator 4 ... shall be required, as a condition of driving, to furnish, upon request, evidence of financial responsibility to a law enforcement officer ... or to another person involved in an accident." TEX.REV.CIV.STAT.ANN. art. 6701h, § 1B (Vernon Supp.1990) (emphasis added). Satisfactory evidence of financial responsibility includes a "written instrument" issued by a liability insurer stating the name of the insurer, the insurance policy number, the policy period, the name of the insured and the policy limits or a statement that the coverage of the policy complies with the required minimum amount of liability insurance. Id. Proof of financial responsibility is defined as "[p]roof of ability to respond in damages for liability, on account of accidents ... arising out of the ownership, maintenance or use of a motor vehicle...." TEX.REV.CIV.STAT.ANN. art. 6701h, § 1(10) (Vernon Supp.1990). 5
Black, Sudderth and Daniel assert that the article 6701h insurance card together with Daniel's opposing summary judgment affidavit raise a fact issue concerning misrepresentation of the liability insurance coverage provided by Victoria Lloyds for the drivers of Wood Brothers' leased vehicles. It is undisputed that the insurance card was the only representation made by Victoria Lloyds to Daniel concerning the scope of insurance coverage. The insurance card given to Daniel by Wood Brothers simply states: "THIS POLICY COMPLIES WITH THE COMPULSORY AUTO LAWS OF THE STATE OF TEXAS." Nothing in the insurance card or the requirements of article 6701h distinguishes between liability insurance for business or personal use. The insurance card does not restrict liability insurance coverage to business use or exclude personal use. It gives no indication that Daniel does not have liability insurance coverage for personal use of his truck. For example, the insurance card does not state that it only applies when the truck is used for business purposes only. 6 Furthermore, there is no indication on the insurance card or otherwise that Daniel was exempt from the requirements of article 6701h.
In response to Victoria Lloyds' motion for summary judgment, Black, Sudderth and Daniel pleaded that the issuance and contents of the insurance card were false and misleading and submitted Daniel's affidavit which stated that (1) it was his understanding from his conversations with Wood Brothers, the payment of premiums, and from the insurance card issued by Victoria Lloyds, that the liability insurance policy he purchased would cover accidents involving his truck whether it was being used for business or personal use, (2) he was aware that Texas law required him to have liability insurance on his truck for personal and business use and he believed that the information on the insurance card confirmed his prior understanding from Wood Brothers that he was purchasing liability insurance for personal as well as business use, (3) it was his purpose in...
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