TEXAS SUPREME COURT OVERTURNS RULING AGAINST INSURER FOR ROADSIDE DEATH, HOLDING INSURERS HAVE NO DUTY TO ENSURE POLICYHOLDERS’ PHYSICAL SAFETY

Last Friday, the Texas Supreme Court held insurers have no legal duty to ensure the roadside safety of their insureds, reversing a ruling in the Court of Appeals that we reported on in April 2020 (ARTICLE).  In Elephant Insurance Company v. Kenyon, No. 20-0366 (Tex. Apr. 22, 2022) (slip op.), Kenyon was involved in a single-vehicle accident.  She called her husband, who came to the scene, and then called Elephant to report the accident.  The relevant portion of her conversation with Elephant’s employee was:

Kenyon: Do you want us to take pictures?

Elephant: Yes, ma’am.  Go ahead and take pictures.

While taking photos of the vehicle damage at the scene, Kenyon’s husband was struck by another car and fatally injured.  Kenyon sued Elephant on negligence, negligent undertaking, and negligent training grounds, alleging that the actions of Elephant’s employee in encouraging them to take pictures at the scene placed her husband in unnecessary danger.  The trial court granted Elephant’s summary judgment on the ground that it owed it no legal duty to Kenyon or her husband with regard to their physical safety at the scene, and its duties were limited to its handling of her claim under the policy.

As we reported in 2020, the Court of Appeals initially affirmed Elephant’s favorable summary judgment, but after an en banc rehearing, withdrew its original opinion and reversed, finding there was at least some evidence Elephant had voluntarily assumed a duty, and that its encouragement of the Kenyons to take pictures could conceivably be related to its claim handling.

The Texas Supreme court has now reversed that ruling, rebuking the court of appeals for essentially creating and imposing a new legal duty that does not exist at common law.  After carefully examining the parameters of permissive interlocutory appeals and the analysis of whether any legal duty exists or should be judicially imposed, the supreme court declined to recognize a legal duty on the part of insurers to ensure the safety of their policyholders at accident scenes.

The court observed that the duty of good faith and fair dealing arises out of the insurer’s exclusive control of the claim handling process, a dynamic which does not give the insurer commensurate control over its policyholders’ safety at the scene of an accident.  The insurer does not control the behavior of the policyholder, of third-party motorists, or of others who may arrive on scene after the accident.  Additionally, the danger of being hit by a car on the side of the road exists regardless of whether a person is taking pictures or not.  The accident that led to Mr. Kenyon’s death could just as easily have happened while exiting the vehicle or while talking to a first responder.  At that moment, the Kenyons had both greater knowledge of their immediate environment and risk of harm, and greater control over their exposure to harm than did the Elephant employee on the other end of the phone line.

The supreme court also rejected the negligent-undertaking theory, noting that the Elephant employee simply took a phone call and guided Kenyon through the first steps of the claim process – a conversation that did not include directing the Kenyons when or how to take pictures or purport to offer any safety advice. 

Editor’s note: MDJW takes this opportunity to congratulate its client the American Property Casualty Insurance Association (APCIA) for granting us the privilege to file an Amicus Brief on their behalf. We also congratulate our law partner and head of our Appellate Section, Levon Hovnatanian, for his efforts in securing this significant victory for Texas insurers.