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Click here for the full text of this decision FACTS:The appellant, Diana C. Avila, obtained an auto insurance policy from appellee Home State County Mutual Insurance Co., through appellee Alfredo J. Loya d/b/a Maverick Insurance Agency (the agency). The policy contained a provision calling for the automatic termination of the policy if the insured failed to pay the continuation premium when it was due. Although a renewal notice was sent, the continuation premium was not paid by its due date. Three days later, Avila was involved in an automobile accident. On that same day, Avila’s daughter tendered a payment premium check to the agency, the local agent of Home State. The check was accepted by the agency which gave the daughter a liability insurance card that showed the period of Avila’s coverage with the effective date as the date of the accident. When Avila submitted a claim regarding the accident, coverage was denied and Avila filed suit. In her affidavit attached to her response to appellees’ summary judgment motion, Avila averred that at the time of the accident, she believed herself to be covered by her insurance policy. She admitted the payment was not made until Sept. 28, 2001. She also admitted that “[she] did not tell [her] daughter about the auto accident before she made the payment,” and “[she] was only able to tell her about the accident I was in that night, after she had already made the payment.” The trial court entered a take-nothing summary judgment in favor of the agency and Home State, and Avila appealed. HOLDING:Affirmed. Avila asserts that the trial court erred in granting its summary judgment because issues of fact exist with regard to her claim of misrepresentations made under Texas Insurance Code Article 21.21, 4(a), and issues of fact exist as to misrepresentations under Texas Business and Commerce Code 17.46(b)(12) (Deceptive Trade Practices Act). The court first addresses whether appellees, by accepting the post-forfeiture premium and reinstating coverage, violated either of the statutes by declining coverage for a claim for indemnification of damages that occurred before the acceptance of the premium and the reinstatement of the policy. The court holds that if an insurer has a reasonable basis for a denial of coverage, it retains the right to deny questionable claims without being exposed to extra-contractual tort claims which require the same predicate for recovery as bad faith claims. Consequently, an insurer who establishes a reasonable basis for denying a claim, even if that basis is shown to be erroneous, enjoys immunity from statutory bad faith under the Texas Insurance Code and the DTPA. But Avila argues that there are material facts that demonstrate coverage predicated on Maverick’s waiver by a course of dealing or the misrepresentation of an agent. In arguing that the agency waived the forfeiture, Avila places primary reliance upon the doctrine explicated in Equitable Life Assurance Society v. Ellis, 105 Tex. 526, 147 S.W. 1152 (1912), that acts of an insurer may result in its waiver of a forfeiture for nonpayment of premiums if those acts consist of “negotiations or transactions with the insured, after knowledge of the forfeiture, by which the insurer recognizes the continued validity of the policy or does acts based thereon.” The statements giving rise to Avila’s argument were statements assertedly made by an employee of the agency named Magdalena or Maggy in a telephone conversation with Avila to the effect that “there was no problem with my insurance, that everything was being taken care of.” However, the court states that even assuming arguendo that those statements could be considered as a misrepresentation, Texas courts have held that post-loss misrepresentations are not misrepresentations of the type that give rise to DTPA 17.46 actions. Consequently, both of Avila’s issues are overruled, and the judgment of the trial court is affirmed. OPINION:John T. Boyd, S.J.; Quinn, C.J., Reavis, J., and Boyd, S.J.

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