First Party Claim vs Third Party Claim

Oak Cliff insurance lawyers need to understand the difference between a first party claim and a third party claim. A 1996 Beaumont Court of Appeals opinion may help. The case is styled, Rumley v. Allstate Indemnity Co.
The wife, Joyce Rumley, 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 insurer, Allstate. Allstate paid PIP benefits but refused to pay liability because the policy contained a family member exclusion. At the time the Texas Supreme Court had granted writ of error but had not yet issued an opinion in National County Mutual Ins. Co. v. Johnson. 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, and violations of the Texas DTPA.
Allstate filed a Motion for Summary Judgement on the grounds that Wife’s claim was a third-party claim for which Defendants 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 and wife appealed.
The summary judgment in favor of Allstate and the claim representative was affirmed.
A third-party claimant cannot pursue an action against an insurer for unfair claims settlement practices under the 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 insurer and spouse. She did not rely upon Allstate’s good faith anymore 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.