The case of the “ghost driver”
In July 2017, Charles Franks filed suit against Liberty County Mutual Insurance Company seeking benefits under his automobile policy. The petition alleged:
A collision occurred on August 21, 2016, in Prairie View, Texas. At the time of the collision, Franks was traveling west on U.S. Highway 290 Business in a safe, reasonable, and lawful manner. Suddenly, an unknown white vehicle traveling at a high rate of speed proceeded to pass Franks, forcing Franks into the right lane and causing his vehicle to collide with another vehicle. Franks suffered injuries as a result of the actions of the unknown driver.
Franks’ policy included uninsured/underinsured motorist coverage. He sought a declaratory judgment establishing the negligence and uninsured status of the unknown driver, thereby entitling Franks to recover damages from Liberty under the uninsured motorist provision in his policy. Further, Franks brought claims for (1) breach of insurance contract; (2) breach of the duty of good faith and fair dealing; (3) deceptive trade practices; and (4) violations of the Texas Insurance Code. Franks also requested a declaratory judgment determining:
The driver of the white vehicle was negligent and was an uninsured/underinsured motorist;
The amount of damages Franks suffered and was legally entitled to recover from the driver of the white vehicle;
Franks’ damages were covered by his policy, and he was entitled to recover those damages from Liberty; and
The amount of damages, attorneys’ fees, interest, and court costs that Liberty was obligated to pay.
In December 2017, Liberty filed a motion to sever and abate Franks’ UIM claim, and the motion was granted. Liberty filed a motion for summary judgment on February 5, 2018, on the basis that no UIM coverage applied to Franks’ claim. On February 6, 2018, the trial court severed and abated Franks’ contractual and extra-contractual claims into trial court Cause No. 2017-49231-A. The UIM claim remained in trial court Cause No. 2017-49231. In March 2018, the trial court granted summary judgment in Cause No. 2017-49231. Franks appealed.
On appeal, Franks contended that the trial court erred in entering summary judgment on his contractual and extra-contractual claims when those claims had been severed and abated. Liberty responded that because the UIM claim was a necessary predicate to the severed claims, the trial court did not err.
The appellate court stated that both parties mistook the effect of the severance order and the judgment entered. The trial court severed from trial court Cause No. 2017-49231 the contractual and extra-contractual causes of action against Liberty and transferred those claims into trial court Cause No. 2017-49231-A. In trial court Cause No. 2017-49231, the trial court then entered judgment dismissing the claims remaining in that suit. The only appeal before the appellate court was from that judgment. Thus, the trial court’s judgment did not and could not have disposed of Franks’ contractual or extra-contractual claims. Accordingly, the only issue before the appellate court was Franks’ suit to determine contractual liability.
The court therefore overruled Franks’ claim that the judgment in trial court Cause No. 2017-49231 was void because it dismissed his contractual or extra-contractual claims.
Franks’ second assertion was that the judgment was improper because it disposed of claims not challenged in Liberty’s motion, which only raised the question of coverage. The court overruled Franks’ assertion, noting that the trial court could not grant summary judgment on Franks’ contractual or extra-contractual claims as they were no longer pending in trial court Cause No. 2017-49231.
The court then turned to the question of coverage under Franks’ policy. The policy defined an uninsured motor vehicle as a land motor vehicle of any type:
1. To which no bodily injury liability bond or policy applies at the time of the accident.
2. To which a bodily injury liability bond or policy applies at the time of the accident. In this case its limit for bodily injury liability must be less than the minimum limit for bodily injury liability specified by the financial responsibility law of the state in which “your covered auto” is principally garaged.
3. Which is a hit-and-run vehicle whose operator or owner cannot be identified and which hits:
a. You or any “family member”;
b. A vehicle which you or any “family member” are “occupying”; or
c. “Your covered auto.”
4. To which a bodily injury liability bond or policy applies at the time of the accident but the bonding or insuring company:
a. Denies coverage; or
b. Is or becomes insolvent.
Relying on subsection three, Liberty contended that the UIM provision provided coverage for accidents that involve unidentified wrongdoers only if there was actual physical contact between the wrongdoer’s vehicle and the insured’s vehicle. Franks did not dispute that there was no physical contact. Rather he contended that subsection one provided coverage in this case because it also applied to “hit-and-run” vehicles. The court stated that the question before it was whether subsection one applied to unknown vehicles as well as known vehicles.
After reviewing case law and citing provisions in the Texas insurance code, the court held that the unambiguous language of the policy provided coverage for a vehicle that was uninsured. It then more specifically limited coverage for an unknown vehicle to actual physical contact between the insured’s vehicle and the unidentified wrongdoer. For these reasons the court overruled Franks’ third and fourth assertions.
Franks v. Liberty County Mutual Insurance Company-Court of Appeals of Texas, Houston-May 14, 2019-No. 14-18-00341-CV.