An appellate court in Texas, affirming a trial court's decision, has rejected an insured's contention that he was entitled to uninsured motorist benefits (“UIM”) for injuries he suffered when an unidentified vehicle – which did not contact his vehicle – led him to collide with a third vehicle.
The Case
Charles Franks sued his auto insurer, Liberty County Mutual Insurance Company, alleging that he was injured when an “unknown white vehicle traveling at a high rate of speed” passed him, forcing him into the right lane and causing his vehicle to collide with a third vehicle. Mr. Franks sought to obtain a declaratory judgment establishing the negligence and uninsured status of the unknown driver, thereby entitling Mr. Franks to recover UIM benefits from Liberty.
Liberty argued that there was no UIM coverage applicable to Mr. Franks' claim. It contended that the UIM provision in its policy only provided coverage for accidents involving an unidentified tortfeasor if there was actual, physical contact between the tortfeasor's vehicle and the insured's vehicle.
Mr. Franks did not dispute that there had not been any physical contact. Rather, he contended that he was entitled to coverage under the first subsection of the policy's UIM provisions because that subsection also applied to “hit-and-run” vehicles.
The trial court granted summary judgment in Liberty's favor, and Mr. Franks appeal.
The Liberty Policy
The Liberty policy defined an uninsured motor vehicle as a land motor vehicle of any type:
- To which no bodily injury liability bond or policy applies at the time of the accident. . . .
- Which is a hit-and-run vehicle whose operator or owner cannot be identified and which hits:
- You or any “family member”;
- A vehicle which you or any “family member” are “occupying”; or
- “Your covered auto”.
The appellate court affirmed.
In its decision, the appellate court explained that in Texas, there must be “actual physical contact” between an insured's vehicle and an unidentified tortfeasor to trigger UIM coverage under Texas Insurance Code Section 1952.104(3).
The appellate court added that the term “actual physical contact” was added to the Insurance Code in 1977 to prevent fraudulent insurance claims against “phantom cars” in single car accidents.
The appellate court then found that the language in the Liberty insurance policy requiring that the vehicle “whose operator or owner cannot be identified . . . hit” the insured's vehicle was “consistent with the statute.”
The appellate court rejected Mr. Franks' argument that subsection one applied to unknown vehicles “whose operator or owner cannot be identified,” noting that that argument was rejected in 1999 by a Texas appellate court. Texas Farmers Ins. Co. v. Deville, 988 S.W.2d 331, 333-34 (Tex. Ct. App. 1999). The appellate court pointed out that Deville held that the specific coverage requirements for unknown vehicles in the statute and the policy controlled over the same definition of an uninsured motor vehicle at issue in Mr. Franks' insurance policy.
The appellate court concluded that the “unambiguous language” of the Liberty policy provided coverage for a vehicle that was uninsured, but then more specifically limited coverage for an unknown vehicle to actual physical contact between the insured's vehicle and the unidentified tortfeasor.
The case is Franks v. Liberty County Mutual Ins. Co., No. 14-18-00341-CV (Tex. Ct. App. May 14, 2019).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].