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Insurance Law No. 01-02-00441-CV, 4/10/2003. Click here for the full text of this decision FACTS: The appellant, Wayne Duddlesten Inc., sued the appellees, Highlands Insurance Co. and Aberdeen Insurance Co., for violations of Texas Insurance Code Article 21.21, negligence, violations of the Deceptive Trade Practices Act, fraudulent inducement, breach of fiduciary duty, breach of the duty of good faith and fair dealing, breach of contract and for a declaratory judgment. Highlands counterclaimed for breach of contract, reformation, fraud in the inducement, breach of express warranty, estoppel, declaratory judgment and bad faith DTPA and insurance code claims. The trial court granted summary judgment against the appellant on its breach of contract, DTPA and insurance code claims, granted the appellees’ motion for judgment on the pleadings as to appellant’s breach of fiduciary duty claim, and granted appellees’ special exception to appellant’s negligence claim. The trial court granted summary judgment for appellant as to appellees’ fraud in the inducement, breach of express warranty and estoppel claims. The case proceeded to a nonjury trial solely on appellees’ counterclaims for breach of contract, reformation, declaratory judgment, and bad faith DTPA and insurance code claims. The trial court ordered that appellant take nothing, and that Highlands should have judgment for breach of contract, attorney’s fees, pre-judgment interest, post-judgment interest and costs. HOLDING: Affirmed. The appellant claims that the appellees breached the provisions of the insurance policies that required appellees to properly investigate and adjust the claims. The appellees argue that, under Texas law, there is no cause of action for the negligent handling of claims, and there is no language in the policy that gives the appellant the right to have specific input into the decision to settle, or to override appellee’s right to settle. The appellant relies on section B to impose a duty on appellees to pay only those claims against the appellant that are valid, relying on the language, “will pay . . . benefits required of you by the Worker’s Compensation law.” The appellant also relies upon the last sentence of section C, which states that the appellees have no duty to defend a claim or proceed in a suit that is not covered by the insurance policy. The appellant claims that this term was violated when the appellees settled claims that should not have been covered by the policy. The court does not agree with the appellant’s interpretation of the policy. Section B states that the appellees will pay, when due, the benefits required. Section C gives appellees the right to investigate and settle all claims, proceedings or suits. The actions taken by appellees pursuant to section C will determine if the appellees are required to pay the benefits discussed in section B. If the appellees exercise their rights under the policy in section C to settle a claim, then payment will be required of appellees under section B. There is no requirement in the policy that appellees obtain the consent of appellant when settling a claim or investigating the merits of a claim, and the court is not permitted to write such a clause into the policy. Dear v. Scottsdale Ins. Co., 947 S.W.2d 908 (Tex. App. – Dallas 1997, pet. denied). By its own language, article 21.04 applies only to life, accident, health, property or casualty insurance. The court holds that the appellant produced no evidence of a deceptive act or misrepresentation to support its claims under the DTPA and insurance code. The purpose of article 5.57 is to keep the amount of premiums to be paid from the field of bargaining. Associated Emp. Lloyds v. Dillingham, 262 S.W.2d 544 (Tex. Civ. App. – Fort Worth 1953, writ ref’d). Side agreements that do not comply with the regulations of the State Board of Insurance are invalid and ineffective. Brookshire Grocery Co. v. Bomer, 959 S.W.2d 673 (Tex. App. – Austin 1997, pet. denied). In this case, the applications for insurance provided a breakdown of the classification of employees, the estimated premiums that would result, and the estimated annual amount of premiums that would be paid. The more detailed retrospective premium payment plans were detailed in the policies, and there is no dispute that the premium payment plans comply with the regulations of the State Board of Insurance. The appellant directs the court to no authority to suggest that every term of a premium payment plan must be included in the application for insurance, and, after considering article 5.57 as a whole, as well as the purpose of the article, the court believes that an interpretation of the article that would require every term and detail of the premium payment plan to be included in the application of insurance would lead to an absurd result. The appellant argues that the insurance policies that it purchased were void and unenforceable because there was no evidence, or alternatively, insufficient evidence, that appellees filed a notice of election as required by the Texas Retrospective Ratings Plan Manual. The court’s review of the evidence indicates that the notice of election form, as well as all three insurance policies, showed that the retrospective premium payment plan would be in effect for three years. Accordingly, the court holds that there was some evidence that the trial court could have relied upon to determine that appellees were in satisfactory compliance with the Texas Retrospective Ratings Plan Manual in its filing of the notice of election. The court further holds that, based upon the same evidence, the trial court’s judgment was not so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. It is undisputed that appellant and appellees are businesses, and that their relationship was based on appellant’s purchase of worker’s compensation insurance. The appellant alleged that a relationship of trust existed between appellant and appellees, stating that appellant trusted appellees to correctly administer its worker’s compensation claims, and that appellees were trusted to perform various services commonly performed by insurers, but it has not alleged facts, even after being allowed time to re-plead, that demonstrate that an informal, confidential relationship existed between the parties that was formed prior to and apart from the insurance contracts. The court holds that, under these facts, the trial court did not err in granting appellees’ motion for judgment on the pleadings as to appellant’s claim of breach of fiduciary duty. The court is not aware of any authority from the Texas Supreme Court that expressly permits plaintiffs to sue insurers, outside of the scope of Stowers, for the negligent handling of claims. In Maryland Ins. Co. v. Head Indus. Coatings and Serv. Inc., 938 S.W.2d 27 (Tex. 1996), the Texas Supreme Court, when asked to recognize a duty of good faith and fair dealing between the insurance carrier and the insured, stated that “Texas law recognizes only one tort duty in this context, that being the duty stated in Stowers. . . .”. A recent 5th U.S. Circuit Court of Appeals decision has also noted that, with regard to third-party insurance claims, Stowersprovides the only common law tort duty in Texas in that setting. Ford v. Cimarron Ins. Co., 230 F.3d 828 (5th Cir. 2000). The court is unwilling to expand the scope of an insurer’s duties to the insured without express language from the Texas Supreme Court authorizing the court to do so. The court holds that the trial court did not err in granting the appellees’ special exception to the appellant’s claim for negligent handling of claims. OPINION: Radack, C.J.; Radack, C.J., Nuchia and Hanks, JJ.

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