Fourth Court of Appeals Imposes New Post-Accident Duty on Auto Insurers
On April 1, 2020, a divided en banc Fourth Court of Appeals imposed a new post-accident duty on auto insurers. In a case of first impression, the Court reversed a Bexar County trial court’s summary judgment in favor of an auto insurer. The Appellate Court found that the auto insurer had a duty to exercise reasonable care when it instructed its insured driver to take photographs of her vehicle immediately following a one-car accident because of the special relationship between an insurer and its insured and the insurer’s knowledge of the risk of harm posed to the insured when taking pictures at the scene of the accident. Kenyon,v. Elephant Insurance Company,, No. 04-18-00131-CV, 2020 WL 1540392 (Tex. App. Apr. 1, 2020).
In Kenyon, a permissive appeal arose from a wrongful death and survival action involving the death of Theodore Kenyon in the second of two (2) successive car accidents. His wife, Lorraine Kenyon appealed a partial summary judgment on her claims against Elephant Insurance Company for misrepresentation under the Insurance Code and DTPA, common law negligence, negligent undertaking, negligent training, and gross negligence.
Under Elephant’s standard auto insurance policy, an insured must report an accident or loss within twenty-four (24) hours or “as soon as practicable.” An insured must also fully cooperate with Elephant during its investigation of an insurance claim. Otherwise, coverage could be denied. For insureds who call to report a claim from the scene of an accident, Elephant encourages them to take pictures of all vehicles involved. In addition to obtaining pictures from its insureds, Elephant’s adjusters independently obtain pictures of vehicle damage after an accident is reported, but prior to any “repair or disposal.”
The Kenyons contracted with Elephant by purchasing a policy that included roadside assistance coverage. On the day of the accident, Lorraine Kenyon was involved in a one-car accident. It was raining, the road was very wet, and her car slid, spun, and hit a guardrail. After calling her husband, who arrived at the scene, Kenyon called Elephant to report the accident, and explained in detail the incident to an Elephant First Notice of Loss (FNOL) representative. The FNOL representative advised Kenyon to call the police, opined as to Kenyon’s potential liability for damage to the guardrail, and instructed Kenyon to, “Go ahead and take pictures.” While Theodore was taking pictures, another car slid off the road in the same manner as Kenyon’s and struck Theodore. Theodore ultimately died as a result of the injuries he sustained from the collision. After the accident and at an off-accident-site location, Elephant obtained pictures of the damage to Kenyon’s car in order to process her claim. Elephant insisted that Kenyon first waive all of her and Theodore’s causes of action before it would process her uninsured/underinsured motorist claim.
Kenyon filed her wrongful death and survival action in Bexar County’s 224th Judicial District Court. In addition to suing the driver who struck Theodore, Kenyon sued Elephant, alleging several different negligence theories, misrepresentation under the DTPA and Insurance Code, and failure to timely settle her uninsured/underinsured motorist claims. After Elephant moved for summary judgment, the trial court rendered summary judgment on all claims except Kenyon’s untimely settlement claim. The trial court’s order specified that its sole basis for granting the partial summary judgment was that Elephant “owed no duty” to the Kenyon. The trial court granted Kenyon permission to appeal the order, limiting the permission to the negligence claims. Kenyon’s petition argued that the controlling question of law was “the existence of a legal duty.”
Having agreed there are no published or reported cases with similar fact patterns, the parties agreed that the question of duty in this case presented an issue of first impression. The majority drew heavily from public policy arguments in reaching its decision, citing that insurance companies encouraging insureds to take pictures at the scene of an accident create safety hazards, exposing the insured, police officers, and other first responders to an increased risk of harm from other drivers, and that police officers have “more issues with people getting out of cars to photograph crash scenes that anything else.”
The majority further cited a police officer’s deposition testimony questioning the rationale for encouraging insureds to take pictures at the scene of a one-car accident when the policy’s coverage is comprehensive, since “you know who’s going to pay, you know who’s at fault because you’re by yourself.” Referencing the Move Over Act, as well as the police officer’s deposition testimony, the Court concluded, “insurance companies encouraging insureds take pictures at the scene of car accidents increases risks of severe bodily injury and death to police officers and other first responders. This consideration weighs in favor of recognizing a duty under the narrow facts of this case.”
The majority repeatedly makes clear that the post-accident duty it recognized in Kenyon extends to the “narrow facts” of this case, but the decision reflects the desire of some courts to impose negligence-based duties on insurance carriers where they did not exist before. It is unclear whether other Texas courts will extend the Kenyon duty to cases with different fact patterns, such as multi-vehicle accidents, or accidents taking place with no adverse weather conditions. For the time being, however, insurers should review their policies regarding instructing or advising drivers to take accident pictures at accident scenes.