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Rumley v. Allstate Indemnity Company6/20/1996
O P I N I O N
Joyce L. Rumley sustained personal injuries in a one-vehicle accident. Her husband, Wilbrun R. Rumley, was the driver. Mrs. Rumley filed a claim for benefits with the Rumleys' insurer, Allstate Indemnity Company. Allstate paid personal injury protection benefits, but refused to pay liability because the policy contained a clause which excluded liability coverage "for you or any family member for bodily injury to you or any family member." At the time, the Supreme Court had granted writ of error but had not yet issued an opinion in National County Mut. Ins. Co. v. Johnson, 829 S.W.2d 322 (Tex. App.--Austin 1992), affirmed, 879 S.W.2d 1 (Tex. 1993). The Supreme Court invalidated the exclusion in its decision in Johnson, 879 S.W.2d at 5, issued October 27, 1993.
On December 9, 1993, Mrs. Rumley sued Allstate and Ted Pate, a Senior Staff Claim Representative for Allstate, for breach of the duty of good faith and fair dealing, violations of Tex. Ins. Code Ann. art. 21.21 Section(s) 3, 4(2), 16(a) (Vernon 1981 & Supp. 1996), and violations of the Texas Deceptive Trade Practices Act. Tex. Bus. & Com. Code Ann. ch. 17 (Vernon 1987 & Supp. 1996).
On February 28, 1994, Allstate settled Mrs. Rumley's claim against Mr. Rumley's estate for the liability policy limits. The Supreme Court overruled the motion for rehearing in Johnson on June 2, 1994. That same day, Allstate filed a motion for summary judgement on the grounds 1) the claim was a third-party claim for which the defendants owed no duty of good faith and fair dealing to Mrs. Rumley; 2) there was a reasonable basis for denying the claim, in that the claim was subject to the family member exclusion, the validity of which was an unsettled issue of law during the relevant time period; and 3) there is no special relationship or contractual privity between Pate and Rumley. The trial court granted summary judgement without stating the reason for granting the motion.
Rumley's sole point of error contends the trial court erred in granting the defendants' motion for summary judgement as a matter of law. The issue on appeal is whether the summary judgement proof establishes as a matter of law that there is no genuine issue of material fact as to one or more of the essential elements of the plaintiff's cause of action. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex. 1985). Evidence favorable to the non-movant is to be taken as true, and every reasonable inference must be indulged in favor of the non-movant. Id. at 548, 549.
A third-party claimant cannot pursue an action against an insurer for unfair claim settlement practices under the Insurance Code. Allstate Ins. Co. v. Watson, 876 S.W.2d 145 (Tex. 1994); see also Transport Ins. Co. v. Faircloth, 898 S.W.2d 269 (Tex. 1995)(a thirdparty claimant under an insurance policy is not a consumer within the meaning of the Texas Deceptive Trade Practices Act.)
At oral argument, Mrs. Rumley conceded the threshold issue before this Court is whether her claim is a third-party claim to which Watson applies; for if it is, she cannot pursue a bad-faith claim against Allstate and Pate and summary judgement would therefore be proper. Neither party cites a case addressing the existence of a duty of good faith and fair dealing where the claimant is a named insured on the very policy on which the liability claim is made against another named insured. Such claims were barred by the doctrine of interspousal immunity prior to the Supreme Court's decision in Price v. Price, 732 S.W.2d 316 (Tex. 1987). After Price a spouse's claim was barred by Endorsement 575 (the family member exclusion clause) until the Supreme Court's decision in Jo
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