McKillip v. Employers Fire Ins. Co.

• Decision Date: 04 October 1996
• Docket Number: No. 06-96-00050-CV,06-96-00050-CV
• Parties: Shannon McKILLIP, Appellant, v. EMPLOYERS FIRE INSURANCE COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 268

932 S.W.2d 268

Shannon McKILLIP, Appellant, v. EMPLOYERS FIRE INSURANCE COMPANY, Appellee.

No. 06-96-00050-CV.

Court of Appeals of Texas,

Texarkana.

Submitted Oct. 1, 1996.

Decided Oct. 4, 1996.

Kelly B. Tidwell, Patton, Tidwell, Sandefur, Paddock, Texarkana, for Appellant.

Kent M. Adams, Kim Coogan, Adams, Coffey, Duesler, Beaumont, for Appellee.

Before CORNELIUS, C.J., and GRANT and STARR, JJ.

OPINION

CORNELIUS, Chief Justice.

Shannon McKillip appeals an adverse summary judgment rendered in her suit against Employers Fire Insurance Company for breach of contract, negligence, and violations of the Texas Deceptive Trade Practices Act. ¹ Because we find that Employers' summary judgment motion did not negate McKillip's causes of action for negligence and DTPA violations, we reverse the summary judgment as to those causes of action and remand for trial.

In March 1992, Shannon McKillip, who was in the process of obtaining a divorce, was told by her husband that State Farm Insurance Company was cancelling her automobile liability insurance policy. She contacted Pat Spradlin, an Allstate agent, to obtain new liability insurance for her vehicle. On April 3, 1992, McKillip met with Spradlin and completed an automobile liability insurance application requesting coverage for uninsured and underinsured motorist coverage, bodily injury uninsured and underinsured motorist coverage, and personal injury protection coverage. McKillip contends that when she paid her down payment, Spradlin told her she was "now insured" and gave her a card meant to serve as temporary proof of insurance.

Spradlin submitted McKillip's application and premium payment, minus her commission, to the Texas Automobile Insurance Plan (TAIP). TAIP administers the state's assigned risk automobile liability insurance plan. On April 9, 1992, TAIP assigned McKillip's application to Employers. Employers issued McKillip an automobile liability insurance policy with an effective date of April 14, 1992.

On April 11, 1992, McKillip was seriously injured in an automobile accident. The driver responsible for the accident did not have sufficient liability coverage to compensate McKillip for her injuries. McKillip sought payment from Employers based on the policy's uninsured and underinsured coverage and personal injury coverage. Employers denied the claim on the ground that the accident occurred at a time when its policy was not in effect.

Section nine of McKillip's application for insurance through the TAIP shows that McKillip's policy with State Farm was cancelled effective April 14, 1992. McKillip swore that she did not provide this information and that section nine was left blank when she signed the application. There is no summary judgment evidence indicating who filled in the blank at section nine of the application, although the State Farm policy is contained in the summary judgment evidence and it shows that the policy date extended to April 14, 1992. There is no summary judgment evidence that the policy, as to Shannon McKillip, was cancelled at a date earlier than April 14, 1992, except Shannon McKillip's sworn statement that her husband told her the policy had been cancelled before that date.

McKillip contends coverage began on April 3, 1992, when she met with Spradlin, completed the application, and was told by Spradlin that she was insured. McKillip also asserts that, pursuant to the TAIP rules, Employers had a duty to contact her and request corrections in her application if it was not correct or complete.

For a defendant to be entitled to summary judgment it must disprove, as a matter of law, at least one of the essential elements of each cause of action alleged by the plaintiff. Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex.1991); Baubles & Beads v. Louis Vuitton, S.A., 766 S.W.2d 377, 379 (Tex.App.--Texarkana 1989, no writ).

When the order granting summary judgment does not specify the grounds the court relied on in granting judgment, such as the order here, the judgment must be affirmed if any of the theories raised in the motion for summary judgment is meritorious. State Farm Fire & Casualty Co. v. S.S. & G.W., 858 S.W.2d 374, 380 (Tex.1993).

McKillip asserts that Spradlin was acting as Employers' agent when Spradlin completed and submitted McKillip's liability insurance application, and that Employers is bound by Spradlin's acts and representations.

This action involves the state's assigned risk plan, a legislative creation governed by statute, TEX. INS.CODE ANN. art. 21.81 (Vernon Supp.1996), with its own administrative rules and procedures. Insurance companies providing automobile liability insurance policies under the assigned risk plan are subject to TAIP rules. Zuniga v. Allstate Ins. Co., 693 S.W.2d 735, 737 (Tex.App.--San Antonio 1985, no writ). The plan's manager assigns the applications for insurance in the plan to insurers proportionate to their share of the state's annual automobile liability insurance business. TEXAS AUTOMOBILE INSURANCE PLAN §§ 4.1, 4.14 (1992). TAIP's manager, not the submitting agent, decides which insurer will ultimately be assigned the policy.

The Texas Insurance Code expressly states who is an agent. ² An insurer's agent is defined as any person who: (1) solicits insurance on behalf of an insurance company; (2) transmits an application or policy to or from an insurance company; (3) receives or delivers a policy on behalf of an insurance company; (4) examines or inspects any risk; (5) receives, collects, or transmits an insurance premium; or (6) adjusts a loss on behalf of an insurance company. TEX. INS.CODE ANN. art. 21.02 (Vernon Supp.1996); Celtic Life Ins. Co. v. Coats, 885 S.W.2d 96, 98 n. 3 (Tex.1994). An insurance agent can act as an agent for both the insured and the insurer. Merbitz v. Great Nat'l Life Ins. Co., 599 S.W.2d 655, 658 (Tex.Civ.App.--Texarkana 1980, writ ref'd n.r.e.). This dual role requires the agent to collect the premium from the insured, deliver the policy for the carrier, and procure insurance for the insured from the carrier. Id. TAIP's unique operating procedures prevented Spradlin from performing any of these actions on Employers' behalf.

At the time Spradlin acted Employers was not the insurer, and the application was not submitted to Employers. Even if Spradlin did make the alleged representations to McKillip, they cannot be imputed to Employers since, as a matter of law,...