Underinsured Motorist

Persons with uninsured coverage in Weatherford, Mineral Wells, Aledo, Azle, Newark, Hudson Oaks, Willow Park, Cresson, Peaster, Millsap, Brock, and other places in Parker County need to have a bit of an understanding of the following case. Or they need to know how to get in touch with an experienced Insurance Law Attorney.
The opinion in this case was issued by the Houston Court of Appeals, 14th District. It was issued on June 21, 2011, and the style is, Chezaray Melancon v. State Farm Mutual Automobile Insurance Company.
In this case, Melancon sued State Farm under the underinsured coverage part of her insurance policy. At trial, the jury found the amount of her personal injuries to be an amount that was less than what she had settled for with other parties in the case. This court said that the unambiguous language of the policy showed that State Farm had no further liability.
The State Farm policy said State Farm must “pay the damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person, or property damage, caused by the accident.” The policy limits State Farm’s liability to the lessor of a. The difference between the amount of [Melancon’s] damages for bodily injury or property damage and the amount paid or payable to [Melancon] for such damages, by or on behalf of persons or organizations who may be legally responsible; and b. The applicable limit of liability for this coverage [$100,000].
Melancon was injured in an automobile accident involving multiple vehicles. He brought suit against two other drivers involved in the accident, Noel Sholes and Miguel Garcia, and Garcia’s employer, Lane Freight, Inc. Melancon joined State Farm as a defendant based on the uninsured portion of the policy. Melancon and State Farm stipulated that (1) Melancon settled his claims against Garcia and Lane Freight for $170,000; (2) Melancon settled his claims against Sholes for $20,012; and (3) State Farm paid Melancon $5,000 in personal injury protection benefits under the policy. The total of these three amounts is $195,012.
A jury found Sholes’s negligence to be the sole cause of the accident and that Melancon’s damages were $168,800. Melancon then demanded State Farm pay the $100,000 of coverage based on this judgment and that Sholes had only paid $20,012.
This appeals court denied Melancon’s demand against State Farm for more money and pointed out the language in the policy and some other points on Texas law.
Attorneys for Melancon pointed to the Texas Insurance Code, Section 1952.106 as justification for their demand to be paid the extra money available in the policy. This court pointed out that the interpretation of the statute was good as far as it went but that it did not state that third-party settlements should not be considered in determining the amount of coverage. Under this statute, underinsured motorist coverage must provide for payment to the insured of all amounts that the insured is legally entitled to recover as damages from owners or operators of underinsured motor vehicles because of bodily injury or property damage. Under Civil Practice & Remedies Code, Section 33.012(b), in determining the amount an insured is legally entitled to recover from the driver or owner of an underinsured vehicle, the court deducts the sum of all settlements, including third-party settlements. It states that “if the claimant has settled with one or more persons, the court shall further reduce the amount of damages to be recovered by the claimant with respect to a cause of action by the sum of the dollar amounts of all settlements.”
Thus, as the court stated, “if an insured obtains third-party settlements in excess of the amount of the insured’s damages, the insured is not legally entitled to recover any damages from the owners or operators of underinsured motor vehicle.
The biggest lesson to be learned from this case is that reading a law or statute by itself is very dangerous. A person has to know how that law or statute interacts with other laws and statutes that exist. Guess what … ? That means get an experienced attorney.