Texas Supreme Court Reverses Appeals Court Judgment, Affirms Trial Win for Thompson Coe Client

Austin Appellate partner Michael Eady argued before the Texas Supreme Court that Elephant Insurance owed no duty to its insured to provide post-accident safety guidance to protect its insured and undertook no such duty. A recent unanimous Texas Supreme Court agreed, reversing the Fourth Court of Appeal’s en banc decision.

Background

After an Elephant insured motorist was involved in a single-car accident on wet, slippery roads, the motorist’s spouse arrived at the accident scene and began taking photos. While at the accident scene, he was tragically struck by another motorist and killed, all during the insurer’s conversation with Elephant’s first notice of loss representative in Virginia.

The issue of first impression in this wrongful-death and survival action is whether a Texas automobile insurer owes a duty to give post-accident advice on being safe at an accident scene.

Judgment for Insurer

Elephant Insurance maintained that no such duty—in essence a duty to protect—existed between insurers and policyholders under these facts. Neither the Elephant contract of insurance nor existing law provided such obligations. The trial court agreed, as did the Fourth Court of Appeals assigned panel in a split decision. On rehearing, however, the Fourth Court of Appeals sitting en banc reversed, reaching the opposite conclusion in all regards, an opinion the Texas Supreme Court called a Gordian Knot that it need not endeavor to unwind.

After rejecting the existence of a duty to protect or provide guidance as part of an insurer’s existing duty of good faith and fair dealing (an argument the Court noted that the court of appeals latched onto sua sponte) and rejecting the argument that Elephant assumed a duty to protect during the call with a first notice of loss representative several state’s away, the Court then balanced the Phillip’s factors relevant to “determining the existence, scope, and elements of legal duties,” agreeing with the trial court that the insurer bore no such duty, holding that “Kenyon’s negligence claims fail for want of any applicable duty.”

Dallas partner Roger Higgins and Austin senior attorney Elizabeth Brabb also assisted in the case.