Part of being a responsible driver is obtaining a policy of liability insurance that will cover personal injuries or wrongful deaths caused by the driver’s negligence. In most east Texas car accident lawsuits, the “real” defendant is the negligent driver’s insurance company (although it may not seem so from the pleadings or the proceedings in front of the jury at trial).
Unfortunately, there can be other requirements in addition to just taking out an appropriate policy and paying one’s premiums on time. Failing to comply with these provisions can cause big problems – not only for the insured individual but also for those hurt by his or her careless actions behind the wheel.
Facts of the Case
In a recent appellate case, the plaintiff was a woman who, along with her two minor children, was involved in a car accident caused by a negligent driver. She sued the driver and obtained a default judgment against him for $39,443. She then filed a second lawsuit, naming the driver’s automobile liability insurance company and a claims service as the defendants. The defendants asserted that they should not be held liable because they had been prejudiced by the driver’s failure to comply with the notice and cooperation provisions of his insurance policy. The defendants also alleged that an actual trial, rather than just a default judgment, was required before they could be held liable under the policy. The trial court granted summary judgment to the defendants, and the plaintiff appealed.
Decision of the Court
The appellate court affirmed the lower tribunal’s dismissal of the plaintiff’s case on summary judgment. Under Texas law, an insurer generally has no duty to defend or indemnify an insured unless the insured forwards suit papers (such as a copy of the complaint filed against him or her by the plaintiff in a car wreck case) and requests a defense in compliance. In other words, if the insured individual does not comply with the notice-of-suit provisions of the insurance policy, the insurance company does not have to defend the insured person in court. However, the court also noted case law to the effect that the insurer may still have an obligation to pay a judgment entered against the insured unless the insurer can prove that the lack of notice prejudiced it as a matter of law.
The plaintiff insisted that there was no prejudice against the defendants because they had actual notice of the suit against the insured and could have defended him, had they so chosen. The court disagreed, finding that the insured’s failure to comply with the notice provisions of the insurance policy or request a defense deprived the defendants of their ability to file an answer on the insured’s behalf, to conduct discovery, and to fully litigate the merits of the plaintiff’s claim. Thus, the court held that the motorist’s failure to notify the defendants of the underlying lawsuit and the resulting default judgment prejudiced the defendants as a matter of law and that, thus, they were entitled to summary judgment on the plaintiff’s claims.
While it is worth noting that the plaintiff still had the option of pursuing the judgment against the motorist directly, it is likely that collection of the full amount would have proven difficult, if not impossible. Thus, the court’s decision had the effect of penalizing not only the insured motorist whose failure to comply with the notice requirements of his policy resulted in a default judgment (and who now has the troublesome problem of an unsatisfied judgment on his or her credit report) but also the plaintiff and her children, who did nothing wrong.
Contact an Attorney About Your Auto Accident Case
At Earl Drott Law, we have 30 years of experience in representing the victims of east Texas car accidents. Attorney Drott is board certified in auto accident law, and he has the skill and experience to give your case the time and attention that it deserves. For a free case evaluation, call us at 903-531-9300. We accept most cases on a contingency fee basis, so you do not have to worry about paying upfront legal fees to get your case started. We get paid when you get paid – when your case is concluded with a settlement or judgment in your favor.
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