Progressive County Mut. Ins. Co. v. Kelley

• Decision Date: 27 March 2009
• Docket Number: No. 08-0073.,08-0073.
• Citation: 284 S.W.3d 805
• Parties: PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY, Petitioner, v. Regan KELLEY, Respondent.
• Court: Texas Supreme Court

284 S.W.3d 805

PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY, Petitioner, v. Regan KELLEY, Respondent.

No. 08-0073.

Supreme Court of Texas.

March 27, 2009.

Rehearing Denied July 3, 2009.

Mark Lapidus, Megan Lynette Knudsen, Burck Lapidus & Lanza, P.C., Houston, for Petitioner.

Jay B. Goss, Bruchez Goss Thornton Meronoff & Hawthorne, Bryan, for Respondent.

PER CURIAM.

In this case, we consider whether two documents issued by an insurance company constitute two separate insurance policies or a single policy. We hold that this is a fact question and remand to the trial court.

Regan Kelley was struck by a car while riding her horse. Medical expenses for her injuries are alleged to have exceeded $1 million. After receiving $100,000 in benefits from the motorist's insurer, Kelley made a claim with Progressive County Mutual Insurance Company ("Progressive") for underinsured benefits under a policy issued to her parents, which also covered Kelley. At the time of the accident, Kelley was an adult living with her parents. Progressive paid the policy limit of $500,025. To cover the remaining damages, Kelley then made a claim under an alleged second policy with a limit of $500,025, also issued by Progressive. At the time of the accident, Progressive insured five of the Kelleys' vehicles. Four vehicles were listed on a two-page document, and the fifth was listed on a separate two-page document. However, the documents had separate policy numbers. Nevertheless, Progressive denied there was a second policy and refused to make any additional payments.

Kelley sued Progressive for breach of contract and Insurance Code violations, while Progressive sought a declaratory judgment requiring it to pay the maximum policy limit amount under only one policy. The suits were consolidated, and both parties filed motions for summary judgment, presenting two issues: (1) whether Progressive issued one or two policies, and (2) if two policies, whether Progressive's "Two or More Auto Policies" anti-stacking provision,¹ found within each policy, limited recovery to one policy's maximum limits. The trial court granted Progressive's motion and denied Kelley's motion, without specifying on which ground. The court of appeals reversed and rendered judgment in favor of Kelley, holding that (1) Kelley established as a matter of law that Progressive issued two separate policies, and (2) Progressive's "Two or More Auto Policies" provision violated public policy, as it had the same effect as an "other insurance" provision previously struck down by this Court. ___ S.W.3d at ___; e.g., Amer. Liberty Ins. Co. v. Ranzau, 481 S.W.2d 793, 797 (Tex.1972). ___ S.W.3d ___, ___. Thus, the court of appeals held that Kelley was entitled to collect under the second policy to the extent of her actual damages. ___ S.W.3d at ___. Progressive appeals to this Court, arguing that the trial court's judgment should be reinstated.

"When both parties move for summary judgment and the trial court grants one motion and denies the other, the reviewing court should review the summary judgment evidence presented by both sides and determine all questions presented and render the judgment the trial court should have rendered." Tex. Workers' Comp. Comm'n v. Patient Advocates of Tex., 136 S.W.3d 643, 648 (Tex.2004) (citations omitted). "When a trial court's order granting summary judgment does not specify the grounds relied upon, the reviewing court must affirm summary judgment if any of the summary judgment grounds are meritorious." FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000) (citations omitted).

Progressive argues it is entitled to judgment as a matter of law because it met its obligations under the single policy by paying its maximum limits, or alternatively that the "Two or More Auto Policies" provision limits Kelley's recovery to a single policy. It argues that the documents clearly and unambiguously demonstrate Progressive only issued one policy to the Kelleys with a maximum coverage of $500,025. In support, Progressive directs the Court's attention to the multi-car discount reflected in the second document, and the affidavit of Debra Henry, Progressive's Litigation Underwriting Specialist, who explained that Progressive has specific procedures for "5+ Car" policies. According to Henry, "5+ Car" policies are split into two pages because Progressive's computer software only allows four vehicles per page, and that the two separate policy numbers generated are a product of Progressive's computer program, not an indication of two separate policies. Henry stated that had there been two policies, Progressive could have charged Kelley two policy fees, rather than the one that it did charge. Also, Henry stated that the multi-car discount reflected on the second document was applicable only because the car listed was the fifth overall under the single policy, and that this discount would not have been available if the car was covered under its own distinct policy. Conversely, Kelley argues there is no fact question as to whether two policies were issued, and that refusing to stack the two policies in these circumstances is prohibited under Texas law. In support, Kelley points to the separate policy numbers and premiums on each document, as well as Progressive's own "Product & Underwriting Guide."

Although this question deals with the interaction of two documents, the rules of construction for insurance contracts apply.² The starting point of this analysis is the instrument itself. See Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983) ("If the written instrument is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous and the court will construe the contract as a matter of law."). Here, the written instrument consists of two pages, and standing alone, contains the information necessary to be an insurance policy. It makes no reference to another related document or policy. In the top right corner, the document states "Page 1 of 2" and "Page 2 of 2," respectively, indicating that those are the only two pages related to that policy. These characteristics suggest the document is a single policy. However, Progressive urges the Court to consider its Product & Underwriting Guide and Henry's affidavit to explain the two documents. Extrinsic evidence is not admissible for the purpose of creating an ambiguity. Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995) (per curiam) (citations omitted). But here, the document does reflect some ambiguity. The reference to the "multi-car discount" on the second document, which covers only one car, creates some ambiguity. See Coker, 650 S.W.2d at 394 ("A contract ... is ambiguous when its meaning is uncertain and doubtful or it is reasonably susceptible to more than one meaning."). Also at issue here is latent ambiguity, which arises "when a...