Thompson Coe Austin partner Michael Eady argued before the Texas Supreme Court in November on behalf of Elephant Insurance in a case that raised three interesting questions:
- Does the duty of good faith and fair dealing owed by an insurer to its insured encompass post-accident safety guidance?
- If no such duty did apply, did Elephant Insurance nonetheless voluntarily assume one?
- If no duty exists and Elephant Insurance did not voluntarily assume a duty to provide post-accident guidance to protect its insured, including instructing them not to take pictures unless it is safe to do so, should the Court recognize such a duty?
This argument was the fifth oral argument in the Texas Supreme Court by a Thompson Coe appellate attorney in 2021.
The case began when an Elephant Insurance Co. LLC policyholder was involved in a one-car accident on a rain-soaked road in San Antonio. The policyholder called Elephant’s first notice of loss representative from the scene. During that short conversation, the insured asked, “Do you want us to take pictures?” to which the Virginia-based representative responded, “Yes, ma’am. Go ahead and take pictures.” Moments later, another driver lost control of her car, near the same spot, causing it to slide into and kill the insured’s husband who had traveled to the accident scene. A wrongful death action was filed against the other drive and Elephant.
Elephant Insurance moved for summary judgment, arguing that it owed no duty to its insured to provide post-accident safety guidance. The district court agreed.
On appeal, the assigned three-judge panel for the Fourth District Court of Appeals in San Antonio affirmed in a split decision. However, after a rehearing, the full appeals court reversed the decision and in a divided opinion held that Elephant owed a duty of reasonable care to the policyholder, either under the existing duty of good faith and fair dealing, the only question being one of breach, and if not that duty, then Elephant nonetheless assumed a duty to act with reasonable care when it built a call center and answered this call.
Elephant asked the Texas high court to review the decision, maintaining that no ordinary duty of reasonable care exists between insurers and policyholders under these facts, however characterized.
Dallas partner Roger Higgins and Austin senior attorney Elizabeth Brabb also assisted in the case.