Segal v. Southern County Mut. Ins. Co.

• Citation: 832 S.W.2d 617
• Decision Date: 14 May 1992
• Docket Number: No. 05-91-00625-CV,05-91-00625-CV
• Parties: Katherine SEGAL, Appellant, v. SOUTHERN COUNTY MUTUAL INSURANCE COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 617

832 S.W.2d 617

Katherine SEGAL, Appellant, v. SOUTHERN COUNTY MUTUAL INSURANCE COMPANY, Appellee.

No. 05-91-00625-CV.

Court of Appeals of Texas,

Dallas.

May 14, 1992.

Rehearing Denied June 26, 1992.

Richard L. Arnold, Dallas, for appellant.

David N. Kitner, Mark M. Donheiser, Dallas, for appellee.

Before STEWART, CHAPMAN and KAPLAN, JJ.

OPINION

STEWART, Justice.

The controlling issue before this Court is the validity of that portion of the "family member exclusion" in a standard form Texas Personal Auto Policy that is applicable to an unemancipated minor child who is a resident of the named insured's household. Southern County Mutual Insurance Company sought a declaratory judgment, contending that the family member exclusion relieved it of any duty to defend Katherine Segal on a contribution claim in a lawsuit brought on behalf of her minor daughter. Segal appeals from a summary judgment granted in favor of Southern. On appeal, Segal argues that the family member exclusion is void because it is in conflict with the Texas Safety Responsibility Law and is against the public policy of this state. Segal also complains that the trial court erred in denying her claim for attorney's fees. For the reasons given below, we reverse and render in part and reverse and remand in part.

BACKGROUND FACTS

On May 7, 1989, Segal was involved in an automobile accident. Both she and her minor daughter suffered personal injuries. Segal was driving a vehicle that she owned. She was the named insured under a standard personal automobile liability policy written by Southern. On April 30, 1990, Segal, individually and as natural guardian of her daughter, filed suit against the drivers of the two other vehicles involved in the accident and against the manufacturer of the car seat occupied by her daughter at the time of the accident. On June 14, 1990, one of the defendants in the underlying cause filed a counterclaim against Segal for contribution. Segal requested Southern to provide a defense to this counterclaim, and Southern did so under a reservation of rights.

Southern then filed this declaratory judgment action and a motion for summary judgment. Segal filed a counterclaim and a motion for partial summary judgment. The trial court granted Southern's motion, denied Segal's motion, and entered a judgment declaring that Southern had no duty to defend Segal in the underlying action. Segal appeals that judgment.

STANDARD OF REVIEW

Either party may move for summary judgment under rule 166a of the Texas Rules of Civil Procedure. When both parties move for summary judgment, each party must carry its own burden, and neither can prevail because of the failure of the other to discharge its burden. Vest v. Gulf Ins. Co., 809 S.W.2d 531, 532 (Tex.App.--Dallas 1991, writ denied). An order denying a motion for summary judgment is not appealable except, as here, when both parties have filed motions for summary judgment and the court has granted one of the motions and denied the other. Tobin v. Garcia, 159 Tex. 58, 316 S.W.2d 396, 400 (1959); Resource Sav. Ass'n v. Neary, 782 S.W.2d 897, 903 (Tex.App.--Dallas, 1989, writ denied).

The Texas Supreme Court has established the following standards for reviewing a motion for 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 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.

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., 690 S.W.2d 546, 548-49 (Tex.1985).

To establish a right to recover as a matter of law, the plaintiff as movant must prove conclusively all elements of its cause of action. Plano Indep. School Dist. v. Oake, 682 S.W.2d 359, 364 (Tex.App.--Dallas 1984), rev'd on other grounds, 692 S.W.2d 454 (Tex.1985). For the defendant as movant to prevail on a summary judgment, she must either (1) disprove at least one element of the plaintiff's theory of recovery or (2) plead and conclusively establish each essential element of an affirmative defense. Traylor v. Unitedbank Orange, 675 S.W.2d 802, 804 (Tex.App.--Beaumont 1984, writ ref'd n.r.e.).

LEGAL ANALYSIS

Segal first argues that the trial court erred in granting Southern's motion for summary judgment and in denying her partial motion because the family member exclusion conflicts with the Texas Safety Responsibility Law. TEX.REV.CIV.STAT.ANN. art. 6701h (Vernon Supp.1992). Segal contends that she may be held legally liable to pay damages to her minor child for injuries caused by Segal's negligent operation of a motor vehicle. Jilani v. Jilani, 767 S.W.2d 671, 673 (Tex.1988) (modified parental immunity and specifically held the parent subject to an automobile tort action brought by unemancipated minor child). Thus, she asserts that the family member exclusion deprives her of coverage for damages that she might become legally obligated to pay, a result that the statute is intended to prevent.

Family Member Exclusion

The record reflects that on March 27, 1987, the State Board of Insurance (the Board) prescribed the family member exclusion as an amendatory endorsement designated as 575. This endorsement amended Part A--Liability Coverage of the Texas Personal Auto Policy and became effective on May 1, 1987. State Board of Insurance, 12 Tex.Reg. 1126 (1987) (Texas Automobile Manual). Thus, the endorsement became a standard provision of such policies. Id. The family member exclusion amends personal auto liability coverage as follows:

We do not provide Liability Coverage for you or any family member for bodily injury to you or any family member. ¹

(Emphasis in original.) To determine whether this exclusion conflicts with the Safety Responsibility Law, we examine the language of the statute. Seay v. Hall, 677 S.W.2d 19, 25 (Tex.1984).

Texas Safety Responsibility Law

Segal argues that the family member exclusion conflicts specifically with section 21(b)(2) of the Texas Safety Responsibility Law. TEX.REV.CIV.STAT.ANN. art. 6701h, § 21(b)(2) (Vernon Supp.1992). First, we note that section 21 of the statute addresses certified or assigned risk policies. The statute requires a person to file with the Texas Department of Public Safety proof of future financial responsibility under certain conditions. See, e.g ., TEX.REV.CIV.STAT.ANN. art. 6701h, § 2(d) (Vernon Supp.1992). A certified policy is one means of meeting this requirement. TEX.REV.CIV.STAT.ANN. art. 6701h, § 18 (Vernon Supp.1992). A "motor vehicle liability policy" is defined in section 21(a) as "an owner's or operator's policy of liability insurance, certified as provided in section 19 or section 20 as proof of financial responsibility...." Section 21(b)(2), upon which Segal relies, states (b) Such owner's policy of liability insurance:

* * * * * *

2. Shall pay ... all sums which the insured shall become legally obligated to pay as damages arising out of the ownership, maintenance or use of such motor vehicle ...

Southern argued at submission that section 21(b)(2) is inapplicable because Segal's policy was not a certified policy and that, because certified policies present specific, known, unusual risks not associated with most policies, legislative decisions on certified policies do not mandate the same decisions as to all automobile policies. Ratcliff v. National County Mut. Fire Ins. Co., 735 S.W.2d 955, 958 (Tex.App.--Dallas 1987, writ dism'd w.o.j.) (legislature's abolition of policy defenses in section 21(f)(1) as to certified policies does not apply to all automobile policies). Consequently, Southern maintains that Segal cannot rely on the language in section 21(b)(2). We disagree.

A certified policy is nothing more than a "policy of liability insurance" that has been properly certified. TEX.REV.CIV.STAT.ANN. art. 6701h, § 21(a) (Vernon 1977). Section 1A(a) of the Safety Responsibility Law sets forth the general requirement for liability insurance as follows:

On and after January 1, 1982, no motor vehicle may be operated in this State unless a policy of automobile liability insurance in at least the minimum amounts to provide evidence of financial responsibility under this Act is in effect to insure against potential losses which may arise out of the operation of that vehicle.

TEX.REV.CIV.STAT.ANN. art. 6701h, § 1A(a) (Vernon Supp.1992). This subsection requires that all persons operating motor vehicles in this State have a policy of automobile liability insurance to provide evidence of financial responsibility to "insure against potential losses" arising from operation of that vehicle. The statute defines "proof of financial responsibility" as "[p]roof of ability to respond in damages for liability, on account of accidents ... arising out of ownership, maintenance or use of a motor vehicle...." TEX.REV.CIV.STAT.ANN. art. 6701h, § 1(10) (Vernon Supp.1992). Construing sections 1A(a), 1(10), and 21(b) together, we conclude that they all require the same liability coverage by one means or another, that is, they require a policy of insurance giving owners and operators of nonexempt motor vehicles the ability to respond in damages for all losses resulting from the ownership, maintenance, or use of a motor vehicle. See Estep v. State Farm Mut. Auto. Ins. Co., 103 N.M. 105, 108, 703 P.2d 882, 885 (1985). ²

Thus, we agree with Segal that the statutory language encompasses the potential liability of a parent to an unemancipated minor child for the negligent operation of a motor vehicle. Further, the supreme court has stated that "[t]here is no question in our minds that the compulsory insurance requirement of the Texas motor vehicle safety law implies that all potential claimants for damages resulting from automobile accidents are...