Elephant Ins. Co. v. Kenyon

• Decision Date: 22 April 2022
• Docket Number: 20-0366
• Citation: 644 S.W.3d 137
• Parties: ELEPHANT INSURANCE COMPANY, LLC, Petitioner, v. Lorraine KENYON, Individually and as Executrix of the Estate of Theodore Kenyon, Respondent
• Court: Texas Supreme Court

644 S.W.3d 137

ELEPHANT INSURANCE COMPANY, LLC, Petitioner,

v.Lorraine KENYON, Individually and as Executrix of the Estate of Theodore Kenyon, Respondent

No. 20-0366

Supreme Court of Texas.

Argued November 30, 2021

OPINION DELIVERED: April 22, 2022

J. Mitchell Smith, Beaumont, for Amicus Curiae Texas Association of Defense Counsel (TADC).

Levon G. Hovnatanian, Austin, for Amicus Curiae American Property Casualty Insurance Association.

William M. Orbelo, for Petitioner Pizana, Kimberly.

Nissa M. Dunn, Roger Higgins, Michael W. Eady, Austin, Richard William Espey, Elizabeth Z. Brabb, Graham Baker, San Antonio, for Petitioner Elephant Insurance Company, LLC.

Daniel J.T. Sciano, Ryan G. Anderson, San Antonio, Grant T. McFarland, Jason Thompson, for Respondent.

Justice Devine delivered the opinion of the Court.

After an insured motorist was involved in a single-car accident, the motorist's spouse arrived at the accident scene and began taking photos. While the spouse was on the side of the road engaging in that activity, he was struck by another vehicle and killed. The motorist alleges her automobile insurer had "instructed" her to take photos; she had relayed that instruction to her spouse, who was complying when the other driver hit him; and the insurer's negligence in issuing such an instruction proximately caused her spouse's death. The issue of first impression in this wrongful-death and survival action is whether the automobile insurer owed the motorist and her husband a duty to process a single-vehicle accident claim without requesting that the insured take photographs or to issue a safety warning along with any such request. Balancing the factors relevant to "determining the existence, scope, and elements of legal duties,"¹ we agree with the trial court that the insurer bore no such duty. We therefore reverse the court of appeals’ judgment and render judgment for the insurer.

I. Background

Lorraine Kenyon lost control of her car on a rain-slick road, striking a guardrail. No other cars were involved. The accident scared Kenyon and rendered her vehicle inoperable, but she was uninjured. Kenyon first called her husband, Theodore, and then her insurer, Elephant Insurance Company, to report the accident. A "first notice of loss" representative working at Elephant's Virginia call center took Kenyon's call. The conversation was recorded and transcribed for the record.²

Shortly after the call began, the recording captured part of a brief exchange between Kenyon and an unknown person that prompted Kenyon to say, "Do we need to call 911? Well, I've got the insurance. Yeah. I'm not — I'm not hurt. No. Just soreness, you know, I think from the seat — from the seat belt." The recording also captured a brief exchange between Kenyon and a firefighter, who stopped to inquire about her condition.

Afterward, Kenyon raised the subject of photographs by inquiring, "Do you want us to take pictures?" The representative answered, "Yes, ma'am. Go ahead and take pictures. And — And we always recommend that you get the police involved but it's up to you whether you call them or not." A short time later, Kenyon mentioned that, before calling Elephant, she had called her husband, who was at their home, a short distance from the accident site. Immediately thereafter, the representative recapped:

Okay. And pictures — And you said you're going to take pictures. And the vehicle is not drivable. Let me go back real quick. It does look like you have roadside assistance towing on the policy, so what I can do is, I can go ahead and transfer you over to them, that way — ... they can help you out with getting the vehicle towed.

There was no discussion about the time, place, or manner for taking any pictures.

At some point, Theodore arrived on scene and began taking pictures. The recording does not reflect when Theodore arrived or when and how Kenyon relayed the request to take pictures.³ Nor does the recording suggest that the call-center employee knew Theodore was en route, on scene, or in the process of taking pictures. But while Kenyon remained on the phone with Elephant's representative, another driver lost control on the wet road; struck Theodore, who was reportedly standing off-road taking pictures; and collided with Kenyon's vehicle. The call ended with the call-center employee making a 911 call at Kenyon's request. Theodore sustained fatal injuries and died on the way to the hospital. Kenyon also suffered injuries, but they were not life-threatening.

Following this undeniably tragic event, Kenyon, individually and as executrix of her husband's estate (collectively, Kenyon), filed a wrongful-death and survival action against Elephant and the other driver. Against Elephant, she alleged several negligence theories—including ordinary negligence, negligent training and licensing,⁴ negligent undertaking, and gross negligence—and claims related to Elephant's handling of her claim for uninsured/underinsured motorist (UIM) benefits. All of the negligence claims were based, in whole or part, on Kenyon's contention that Elephant's call-center employee was negligent in "instructing" her to take unnecessary photographs of a single-vehicle accident because the instruction to do so substantially increased the risk of harm to Theodore. Kenyon argued that Elephant failed to train its first-notice-of-loss representatives to instruct insureds at the scene of an auto accident "in a safe and competent manner." Kenyon alleged that, due to the "special relationship" between an insurer and insured, Elephant had a general "duty to act as a reasonable and prudent insurance company" and breached that duty "when it instructed the insureds to take photographs from the scene." If such a duty did not already exist, she alleged that one arose when Elephant affirmatively acted to guide her through the post-accident claims process.

In the course of discovery, Elephant's call-center employee testified that she was trained to obtain information about the accident, who was at fault, and the existence of any injuries, as well as to encourage the insured to take photographs of the accident scene. But she was not trained to inquire about the insured's safety or to ask whether the insured was in a safe location. Even so, Kenyon testified that she did not expect Elephant's employee to provide safety guidance, that she believed she and Theodore were safe, and that if either of them had felt otherwise, they would have taken appropriate precautions.

Elephant moved for traditional and no-evidence summary judgment on all of Kenyon's claims. With respect to the negligence and gross-negligence claims, Elephant argued, among other things, that (1) Kenyon's reliance on a "special relationship" between an insurer and insured does not give rise to duties outside of the claim-processing context, (2) an insurer bears no duty to ensure an insured's safety, (3) Elephant owed no duty to ensure Theodore's safety, and (4) Kenyon could produce no evidence that Elephant "breached any duty or standard of care imposed by Texas law." Elephant further argued that the evidence conclusively negated the elements giving rise to a duty under a negligent-undertaking theory and, in the alternative, that no evidence supported the elements of such a duty or the predicates to establishing gross negligence for exemplary-damages purposes.

The trial court denied summary judgment as to Kenyon's UIM claims, which are not at issue in this proceeding, but rendered judgment in Elephant's favor on all of the negligence and gross-negligence claims, concluding that the insurer "owed no duty" to the Kenyons with respect to those claims. The court granted Kenyon permission to take an interlocutory appeal of the order granting summary judgment on the negligence and gross-negligence claims, observing that (1) the portion of the order disposing of those claims involves controlling questions of law as to which there is a substantial ground for difference of opinion regarding whether Kenyon has stated viable claims against Elephant for damages arising from Theodore's death and (2) an immediate appeal of that portion of the order may materially advance termination of the litigation because those claims represent the majority of the claimed damages.⁵

Kenyon timely filed an application for a permissive interlocutory appeal and presented the controlling legal issues as whether an insurer has a duty to "exercise reasonable care in providing [post-accident] guidance so as not to increase the risk of harm to its insured," and if not, whether Elephant voluntarily assumed such a duty.⁶ The court of appeals accepted the appeal,⁷ and in a split decision, the panel affirmed the trial court's summary judgment. Considering the undisputed facts and viewing the record favorably to Kenyon as the nonmovant, the panel majority conducted a balancing inquiry in determining that the insurer did not owe a duty to the Kenyons under the circumstances alleged. The court also concluded that the negligent-undertaking claim failed because Elephant did not undertake any affirmative action for the Kenyons’ protection.

On rehearing, the en banc court withdrew the panel opinion and reversed the trial court's order as to all of Kenyon's negligence and gross-negligence claims.⁸ In doing so, the appellate court labored to the conclusion that its only obligation in the permissive appeal was to ascertain whether Elephant owed any duty at all to the Kenyons.⁹ Viewing its objective narrowly, the court stated that it either could not or would not determine whether any such duty actually applies to the facts and circumstances surrounding the occurrence in question.¹⁰ Rather, the court treated the scope of a duty as a question of "breach" that it was neither asked nor required to decide.¹¹ After observing that insurers do indeed owe their insureds "a duty of good faith and fair dealing"—which is a bad-faith cause of action related to claims processing—the court concluded that this...