Howard v. INA County Mut. Ins. Co.
| Decision Date | 28 August 1996 |
| Docket Number | No. 05-95-00489-CV,05-95-00489-CV |
| Citation | 933 S.W.2d 212 |
| Parties | Michael T. HOWARD, Appellant, v. INA COUNTY MUTUAL INSURANCE COMPANY, Appellee. |
| Court | Texas Court of Appeals |
Bruce A. Flint, Law Offices of Bruce A. Flint, P.C., Dallas, for Appellant.
George L. Lankford, Fanning Harper & Martinson, Dallas, for Appellee.
Before OVARD, JAMES and HANKINSON, JJ.
This case involves the written rejection exception to article 5.06-1 of the Texas Insurance Code, the statutory provision governing uninsured and underinsured motorists coverage. Michael T. Howard appeals the trial court's grant of summary judgment in favor of INA County Mutual Insurance Company ("INA") and the denial of his own summary judgment motion. Howard contends generally that the trial court erred by reforming the insurance policy to reject coverage retroactively under an expired policy and by considering the intent of the parties to the insurance policy in determining coverage. We hold that the parties' intent may not be considered in determining whether the insured validly rejected uninsured/underinsured motorists coverage under article 5.06-1(1) of the Texas Insurance Code, and therefore, uninsured/underinsured motorists coverage cannot be rejected retroactively. As a result, we conclude that uninsured/underinsured motorists coverage existed at the time of Howard's accident. We reverse the trial court's judgment and remand to the trial court for further proceedings.
The facts are undisputed for the purposes of this appeal. Howard suffered personal injuries as the result of an automobile accident with an underinsured motorist on February 4, 1993. At the time of the accident, Howard was driving a company vehicle, acting within the scope of his employment with Palestine Contractors, Inc. ("Palestine"). INA insured Palestine for liability coverage on its vehicles under a commercial automobile policy issued for the period August 15, 1992 to August 15, 1993. The policy insured 202 vehicles for seventeen named insureds with an estimated one-year premium of $91,522.
INA did not charge Palestine a premium for uninsured/underinsured motorists ("UM/UIM") coverage during the policy period. The policy included a Texas UM/UIM coverage selection form (the "original coverage selection form"). Palestine's vice-president, Phil Jenkins, signed the form but failed to date it or to select any of the three coverage options available. That form appears within the copy of the entire policy attached to INA's motion for summary judgment:
Palestine Contractors, Inc. United Employers, Ins. H 05824369
Agency
--------------------------- ------------------------- -----------------------
Named Insured or Applicant Agent's Name Policy Number
In accordance with the provisions of Article 5.06"1, Texas Insurance Code, as
amended, I acknowledge that I have been given the opportunity to purchase
Uninsured/Underinsured Motorists Coverage in amounts up to the automobile
liability coverage limits I have on the policy shown (or the policy for which
I have applied), and I have also been given the right to reject the
Uninsured/Underinsured Motorists Coverage and have made the following
choice(s)
1. [ ] I hereby reject
Uninsured/Underinsured Motorists
Coverage in its entirety
2. [ ] I hereby reject the property damage
feature of Uninsured/Underinsured
Motorists Coverage only
3. [ ] I hereby accept
Uninsured/Underinsured Motorists
Coverage in its entirety, realizing
that coverage will apply only for
motor vehicles which meet the
definition of "owned automobiles"
as provided in this policy
The rejection(s) indicated above shall apply on the policy shown (or applied
for) and on all future renewals of such policy and all future policies issued
to me by this Company because of change of vehicle or coverage, or because of
an interruption of coverage, until I notify the company in writing that
thereafter Uninsured/Underinsured Motorists Coverage is desired
/s/ Phil
Jenkins
Signature of
Named
Insured or
Applicant
__________
Date
----------
In connection with the February 4, 1993 accident, Howard filed a claim for UIM benefits under Palestine's policy. Because Jenkins signed the original coverage selection On September 26, 1994, Jenkins executed a new UM/UIM coverage rejection form (the "1994 coverage rejection form"), indicating Palestine's rejection of UM/UIM coverage in its entirety for the policy period "8/15/92--8/15/93." That form provided in part:
form, INA treated it as a rejection of all UM/UIM coverage and denied Howard's claim. Howard filed suit against INA on June 27, 1994, alleging a cause of action for breach of the duty of good faith and fair dealing by denying his claim in the absence of a written rejection of UM/UIM coverage.
In accordance with the provisions of Article 5.06-1, Texas Insurance Code, as amended, I have been given the opportunity to purchase Uninsured/Underinsured Motorists Coverage in amounts up to the automobile liability coverage limits I have on my policy, and I have also been given the right to reject Uninsured/Underinsured Motorists Coverage and have made the following choice(s):
1. (xx) I hereby reject Uninsured/Underinsured Motorists Coverage in
its entirety; or
....
The rejection(s) indicated above shall apply on my policy and on all future renewals of such policy and all future policies issued to me by this Company because of change of vehicle or coverage, or because of an interruption of coverage, until I notify the Company in writing that thereafter Uninsured/Underinsured Motorists Coverage is desired.
(Emphasis added.)
On November 2, 1994, Howard and INA each filed motions for summary judgment. Howard moved for summary judgment on his bad faith claim, asserting as grounds that Palestine failed to meet the statutory requirements of the Texas Insurance Code for rejecting UM/UIM coverage because it failed to select either box rejecting coverage on the original coverage selection form. INA moved for summary judgment on two grounds: (1) Palestine and INA voluntarily reformed the policy retroactively to reflect their intent and agreement to reject the UM/UIM coverage at the time INA originally issued the policy; and (2) INA was not liable for breach of the duty of good faith and fair dealing because no UM/UIM coverage existed under the policy. The trial court granted INA's motion and ordered that Howard take nothing by his claim.
This Court reviews a summary judgment de novo to determine whether a party's right to prevail is established as a matter of law. See Capitan Enters., Inc. v. Jackson, 903 S.W.2d 772, 775 (Tex.App.--El Paso 1994, writ denied). An appellate court follows well-established procedures when reviewing a summary judgment:
1. The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to summary judgment as a matter of law;
2. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true; and
3. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor.
Nixon v. Mr. Property Management Co., Inc., 690 S.W.2d 546, 548-49 (Tex.1985). A plaintiff, as movant, must conclusively prove all essential elements of his claim. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986). Summary judgment for a defendant is proper when the summary judgment evidence negates an essential element of the plaintiff's cause of action as a matter of law. See Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 27 (Tex.1990).
When both parties move for summary judgment, each party bears the burden of establishing that it is entitled to judgment as a matter of law, and neither party can prevail because of the other's failure to discharge his burden. Guynes v. Galveston County, 861 S.W.2d 861, 862 (Tex.1993); State Farm Lloyds, Inc. v. Williams, 791 S.W.2d 542, 549-50 (Tex.App.--Dallas 1990, writ denied). If the trial court grants one motion and denies the other, we may render the judgment the trial court should have
rendered. Jones v. Strauss, 745 S.W.2d 898, 900 (Tex.1988). But if a movant does not show its entitlement to summary judgment as a matter of law, we must remand the case to the trial court. Gibbs v. General Motors Corp., 450 S.W.2d 827, 829 (Tex.1970). When both parties move for summary judgment, we consider all the evidence accompanying both motions in determining whether to grant either party's motion. Dallas County Appraisal Dist. v. Institute for Aerobics Research, 766 S.W.2d 318, 319 (Tex.App.--Dallas 1989, writ denied).
In his first point of error, Howard challenges the trial court's judgment by contending that Palestine failed to reject UM/UIM coverage in writing as a matter of law. Without the written rejection, Howard argues UM/UIM coverage existed as a matter of law. In related points of error four through six, Howard argues that: (1) the trial court could not reform the policy retroactively because the legislature created an express exception to the general rule allowing retroactive reformation of a contract; (2) retroactive reformation frustrates the statute's operation by creating a class of insureds unable to obtain the coverage the legislature intended to provide; (3) the parties' intent should not be considered in determining...
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