Employers Cas. Co. v. Mireles

• Decision Date: 12 February 1975
• Docket Number: No. 15366,15366
• Citation: 520 S.W.2d 516
• Parties: EMPLOYERS CASUALTY COMPANY, Appellant, v. Mario MIRELES et al., Appellees.
• Court: Texas Court of Appeals

Page 516

520 S.W.2d 516

EMPLOYERS CASUALTY COMPANY, Appellant, v. Mario MIRELES et al., Appellees.

No. 15366.

Court of Civil Appeals of Texas San Antonio.

Feb. 12, 1975.

Rehearing Denied March 19, 1975.

Robert A. Allen, Dayton G. Wiley, Wiley, Plunkett, Gibson & Allen, San Antonio, for appellant.

Coffee, Goldston & Bradshaw, Austin, for appellees.

BARROW, Chief Justice.

Appellant filed suit seeking a declaratory judgment that it was not obligated to defend Mario Mireles in a suit brought by Joyce N. Dannar, et al., to recover damages sustained in an automobile collision. Appellant had issued an automobile liability insurance policy to Mireles through the Texas Auto Insurance Plan (formerly known as Texas Assigned Risk Plan), but urged that the policy had been breached by Mireles' failure to report the accident as soon as practicable and to immediately forward the suit papers to appellant. Joyce N. Dannar, et al., intervened in the suit and sought a declaration that appellant was obligated to defend the suit and also to pay any sums adjudged against Mireles in the suit. The case was tried before a jury, but at the conclusion of the evidence, the trial court instructed a verdict for Mireles and intervenors. Judgment was entered declaring that appellant was obligated to defend Mireles in the suit filed by intervenors. All other relief was denied. ¹ Appellant timely perfected its appeal which has been replied to only by intervenors.

Since this is an appeal from the granting of an instructed verdict, we must accept as true the evidence supporting appellant's position in this controversy. All conflicts and inconsistencies in the evidence must be resolved in its favor and we must draw all inferences therefrom most favorable to appellant. Constant v. Howe, 436 S.W.2d 115 (Tex.1968).

About March 30, 1972, Mireles attempted to purchase an automobile liability policy through Allstate Insurance Company. The Allstate agent advised him that he had too many traffic violations on his record for Allstate to issue a policy and referred him to the Rodriguez General Insurance Agency in San Antonio. Julian Rodriguez, owner of the agency, helped Mireles fill out an application for a policy through the Texas Automobile Insurance Plan and mailed the application to the Plan office in Austin, together with the annual premium of $173.70. Mr. Rodriguez did issue a policy providing collision and comprehensive coverage to Mireles through one of the companies represented by the Rodriguez Agency. The manager of the Plan assigned the Mireles risk to appellant on April 4, 1972. The policy had been financed for Mireles through the Houston Premium Finance Corporation, and on April 10, 1972, appellant sent the original policy effective April 5, 1972, to April 5, 1973, to the Houston Premium Finance Corporation. A cover letter advised that all accidents should be reported to appellant's district office at 100 Tower Life Bldg., San Antonio. A copy of this letter was sent to both Mireles and the Rodriguez agency.

Mireles was involved in a serious automobile collision on May 21, 1972, when his pick-up truck collided with a vehicle occupied by intervenors. Mireles testified that he reported the accident the next day by a long distance telephone call to the receptionist at the Rodriguez Agency. Two days later, he went to the agency and signed a written report of the accident which was prepared by the receptionist. The subsequent facts are rather inconclusive in that the Rodriguez Agency was closed in the fall of 1972 and neither Rodriguez, his wife, nor the two former employees who testified, had any direct recollection of the Mireles claim and none of the agency records were available. Furthermore, Mireles had made a claim under his collision policy for the damage to his vehicle, and this claim was paid after about a two-month delay. There is no direct evidence that appellant had any notice of the accident or intervenors' suit until they received a copy of the citation and petition around December 4, 1972.

It is settled law that the provision of the policy requiring that notice of an accident be given the insurer 'as soon as practicable' is a condition precedent to liability. In the absence of waiver or other special circumstances, failure to perform the condition constitutes an absolute defense to liability on the policy. ² Dairyland County Mutual Ins. Co. of Texas v. Roman, 498 S.W.2d 154 (Tex.1973); Members Mutual Insurance Company v. Cutaia, 476 S.W.2d 278 (Tex.1972). It is not questioned here that if notice was required and not given until after December 4, 1972, Mireles did not comply with the notice provision in his policy.

Intervenors urge, however, that the case should be affirmed because appellant's liability on its policy issued under the assigned risk plan is absolute under Section 21(f) of the Safety Responsibility Act, Article 6701h, Vernon's Tex.Rev.Civ.Stat.Ann. (1969). This section provides in part that the liability of the insurance company shall become absolute whenever injury covered by said motor vehicle liability policy occurs and that no violation of the policy shall defeat or void it. It is seen, however, that a 'motor vehicle liability policy' as used in Section 21(f) is defined in Section 21(a) as one Certified as provided in Section 19 or Section 20 as proof of financial responsibility. By the terms of the Safety Responsibility Act one comes under the authority of the Act, and thus, is required to give proof of financial responsibility by virtue of having either an automobile accident or a conviction for driving while intoxicated . One of the statutory means of furnishing proof of financial responsibility is by filing a certificate of insurance. This is accomplished by the insurer filing with the Department of Public Safety a form SR--22.

It is only after a form SR--22 is filed that the automobile liability policy becomes Certified and is a 'motor vehicle liability policy' within the definition set forth in Section 21(a). Western Alliance Insurance Company v. Albarez, 380 S.W.2d 710 (Tex.Civ.App.--Austin 1964, writ ref'd n.r.e.); National Surety Corp. v. Diggs, 272 S.W.2d 604 (Tex.Civ.App.--Fort Worth 1954, writ ref'd n .r.e.); McCarthy v. Insurance Company of Texas, 271 S.W.2d 836 (Tex.Civ.App.--San Antonio 1954, no writ); United States Casualty Company v. Brock, 345 S.W.2d 461 (Tex.Civ.App.--Amarillo 1961, writ ref'd). Cf. Lumbermens Mutual Insurance Company v. Grayson, 422 S.W .2d 755 (Tex.Civ.App.--Waco 1967, writ ref'd n.r.e.).

On the other hand, a person is eligible for an automobile liability policy under the assigned risk plan if he is a high risk driver even though he has not been required by the Safety Responsibility Act to furnish proof of financial responsibility. For example, certain classes of drivers such as teen-age drivers, elderly drivers, or other drivers regarded as bad risks by insurance companies would have difficulty in securing a policy other than through the assigned risk plan. The only requirements for a high risk driver to secure a policy through the assigned risk plan are that he possesses a valid driver's license and has been unable to procure a regular policy. Texas Automobile Insurance Plan, Section 9. There is no statute or regulation of the Plan which requires such an assigned risk policy to be Certified or that makes liability under such policy absolute.

Intervenors cite Kahla v. Travelers Insurance Company, 482 S.W.2d 928 (Tex.Civ.App.--Houston (14th Dist.) 1972, writ ref'd n.r.e.) in support of their contention that a policy issued under the Texas Assigned Risk Plan is absolute under Section 21(f). The opinion does not state whether Kahla's policy was Certified or not, but assumes, without consideration of the point, that the policy is within the definition set forth in Section 21(a). Since none of the foregoing authorities were distinguished, we must assume, as the Court obviously did, that the Kahla policy was Certified. In any event, there was no affirmative pleading by Travelers of a policy breach as required by Rule 94, Texas Rules of Civil Procedure (1967) . Dairyland County Mutual Ins. Co. of Texas v. Roman, Supra. We therefore do not consider that this case is authority for the proposition that a policy which was not Certified as required by the Safety Responsibility Act is absolute where issued under the Texas Automobile Insurance Plan.

The evidence is undisputed that Mireles' policy had not been certified, and was not a 'motor vehicle liability policy' as defined in Section 21(a). Therefore, Section 21(f) has no application and appellant is not precluded from asserting a violation of said policy provisions.

Intervenors assert that, in any event, the case should be affirmed because Rodriguez General Insurance Agency was appellant's agent as a matter of law. Article 21.02 of the Tex.Ins.Code Ann., V.A.T.S. (1963), provides in part:

'Any person who solicites insurance on behalf of any insurance company, whether incorporated under the laws of this or any other state or foreign government, or who takes or transmits other than for himself any application for insurance or any policy of insurance to or from such company, or who advertises or otherwise gives notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance of any such company, or who shall examine or inspect any risk, or receive, or collect, or transmit any premium of insurance, or make or forward any diagram of...