Tatum v. Mid-Century Ins. Co., MID-CENTURY

• Decision Date: 26 March 1987
• Docket Number: MID-CENTURY,No. B14-86-752-CV,B14-86-752-CV
• Citation: 730 S.W.2d 41
• Parties: David TATUM, Appellant, v.INSURANCE COMPANY, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 41

730 S.W.2d 41

David TATUM, Appellant, v. MID-CENTURY INSURANCE COMPANY, Appellee.

No. B14-86-752-CV.

Court of Appeals of Texas, Houston (14th Dist.).

March 26, 1987.

Rehearing Denied April 23, 1987.

Mark A. Salvato, Houston, for appellant.

Mike Johanson, Houston, for appellee.

Before PAUL PRESSLER, MURPHY and ELLIS, JJ.

OPINION

ELLIS, Justice.

Appellant, David Tatum ("Tatum"), sued his automobile insurance carrier, appellee, Mid-Century Insurance Company ("Mid-Century"), to recover damages arising from injuries sustained in a motor vehicle collision with an automobile driven by Karen Gilpin. The trial court granted summary judgment in favor of Mid-Century. After obtaining a severance of his cause of action from the original suit against Gilpin and Mid-Century, Tatum now appeals the order granting summary judgment in favor of Mid-Century. We affirm.

Tatum concedes in his sole point of error that there are no genuine issues of material fact precluding summary judgment. He contends, however, that the trial court erred in granting Mid-Century's motion for summary judgment because the sale of underinsured motorist coverage in an amount equal to the statutory minimum limit constitutes constructive fraud and is injurious to the public interest.

The facts of the case are undisputed. Tatum was the driver of an automobile rear-ended by a vehicle driven by Karen Gilpin in Houston, on August 28, 1984. Tatum sued Gilpin for injuries sustained in the accident. He subsequently joined his auto insurer, Mid-Century, as a party defendant, filing suit pursuant to the underinsured motorist provision of his policy.

Gilpin's insurance policy contained liability limits of $15,000 per person/$30,000 per accident. Tatum's policy with Mid-Century provided uninsured/underinsured motorist coverage in the amounts of $15,000 per person/$30,000 per accident. Tatum had no other uninsured/underinsured motorist coverage in effect the date of the accident.

Mid-Century moved for summary judgment on the basis that the vehicle driven by Gilpin was not an "underinsured motor vehicle" as statutorily defined; hence, Tatum had no cause of action against Mid-Century pursuant to the underinsured motorist coverage of his policy. We agree.

The Texas Insurance Code defines an "underinsured motor vehicle" as:

(b) [A]n insured motor vehicle on which there is valid and collectible liability insurance coverage with limits of liability for the owner or operator which were originally lower than, or have been reduced by payment of claims arising from the same accident to, an amount less than the limit of liability stated in the underinsured coverage of the insured's policy.

Tex.Ins.Code Ann. art. 5.06-1(2)(b) (Vernon 1981) (emphasis added).

The Texas Motor Vehicle Safety-Responsibility Act mandates the minimum limits permitted for underinsured motorist coverage. At the time of the accident the liability limits were as follows:

[E]ffective January 1, 1984, Fifteen Thousand Dollars ($15,000) because of bodily injury to or death of one person in any one accident, and, subject to said limit for one person, Thirty Thousand Dollars ($30,000) because of bodily injury to or death of two (2) or more persons in any one accident, and Fifteen Thousand Dollars ($15,000) because of injury to or destruction of property of others in any one accident....

Tex.Rev.Civ.Stat.Ann. art. 6701h, § 5(c)6 (Vernon Supp.1987).

Tatum does not contest the fact that the underinsured liability insurance minimums applicable to his vehicle and the one driven by Gilpin were equal. He grants in his brief that the vehicle driven by Gilpin was not "underinsured" by statutory definition, since her liability coverage was not less than the minimums stated in the underinsured coverage provision of Tatum's policy ($15,000). The trial court thus correctly held Tatum had no valid claim for underinsured benefits pursuant to his policy with Mid-Century. We find summary judgment was properly granted for this reason alone. Geisler v. Mid-Century Insurance Co., 712 S.W.2d 184, 187 (Tex.App.--Houston [14th Dist.] 1986, writ ref'd n.r.e.); Muller v. Allstate Ins. Co., 627 S.W.2d 775, 777 (Tex.App.-Houston [1st Dist.] 1981, no writ).

However, we will address Tatum's claim that summary judgment was improper because Mid-Century's sale of underinsured motorist benefits constitutes constructive fraud and is injurious to the public interest. Tatum argues in support of his position that a policyholder injured by a motorist who is insured in the minimum statutory amount can never collect benefits pursuant to his policy's underinsured motorist coverage. Tatum asserts the aim of the statutory provisions is thus necessarily subverted.

In so maintaining,...