Additional Insured Unable To Make First Party Claim

Arlington insurance lawyers need to know the cases where an insured can sue under an insurance policy and where they cannot. It is not always easy to do. A 1996, Beaumont Court of Appeals opinion is a good case to read. The style of the case is, Rumley v. Allstate. Here is some of the relevant information.
Joyce Rumlet, (Wife) sustained personal injuries in a one car vehicle accident in which her husband, Wilburn Rumley, was the driver. Mrs. Rumley filed a claim for benefits under their policy with Allstate. Allstate paid Personal Injury Protection benefits but refused to pay liability because the policy contained a family member exclusion. At the time, the Texas Supreme Court was reviewing a case on this issue but had not yet issued an opinion. In that decision, the Texas Supreme Court invalidated the family member exclusion. Wife sued Allstate and Ted Pate, a senior staff claims representative for Allstate, for breach of duty of good faith and fair dealing, violations of the Texas Insurance Code, Section 541.060 and violations of the Texas Deceptive Trade Practices Act, Section 17.46.
Allstate filed a Motion for Summary Judgment on the grounds that Wife’s claim was a third party claim for which Allstate owed no duty of good faith and fair dealing; there was a reasonable basis for denying the claim in that the family member exclusion was an unsettled issue of law; and there was no special or contractual privity between Pate and Rumley. The trial court granted summary judgment. Wife appealed.
This Court held in favor or Allstate and the claim representative.
In the opinion, this court stated that a third party claimant cannot pursue an action against an insurer for unfair claims settlement practices under the Texas Insurance Code.
Although Wife was a named insured on the policy and premiums were paid from community funds thereby establishing Wife’s contractual relationship with Allstate, when Wife asserted a liability claim against her spouse, she assumed a posture of a third party claimant.
In the context of her claim based upon her husband’s negligence, Wife was antagonistic to both Allstate, the insurer, and her spouse. She did not rely upon Allstate’s good faith any more than any other injured party would.
As a third party claimant, Wife had no standing to assert extra-contractual and statutory claims against Allstate or the claims representative for denial or delay in the payment of her claim.