Allstate Indemnity Co. v. Forth

Because there are no allegations that the insured suffered damages or that the manner in which the insurance company settled the insured's medical expenses caused her any injury, the trial court was correct to dismiss her suit.

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Click here for the full text of this decision FACTS:Pat Forth’s daughter required medical treatment in 1997 as the result of an auto accident. The personal-injury-protection clause of Forth’s Allstate auto insurance policy covered “reasonable medical expenses incurred for necessary medical services.” Allstate settled Forth’s medical bills for less than the actual amount billed. Forth sued Allstate for injunctive and declaratory relief, alleging that it arbitrarily reduced her bills without using an independent and fair evaluation to determine what amount of her medical expenses were reasonable. According to Forth, Allstate routinely discounts medical expenses by comparing those charges to a third-party contractor’s computerized database. Allstate then offers about 85 percent of the medical expenses reflected in that database for the same treatment or procedure. Forth did not claim that Allstate’s conduct had caused her any damage. In the trial court, Allstate filed a motion to dismiss, arguing that Forth lacked standing, because she had no claim for damages, and Allstate had not caused her any actual injury. The trial court granted Allstate’s motion, and the court of appeals affirmed in part and reversed in part, holding that Forth lacked standing to seek prospective relief, because Allstate no longer insured her, but that she could seek retrospective relief for any injury suffered while she was a policy holder. The court concluded that, if a fair and independent evaluation of the medical bills revealed that Allstate paid less than the full amount of Forth’s “reasonable expenses,” then Forth could claim injury because the terms of the insurance contract required that reasonable expenses be paid. HOLDING:The court reverses the court of appeals’ judgment and renders judgment dismissing Forth’s claims against Allstate. The court of appeals relied on Black v. American Bankers Insurance Co., 478 S.W.2d 434 (Tex. 1972), and American Indemnity Co. v. Olesijuk, 353 S.W.2d 71, 72 (Tex. Civ. App. � San Antonio 1961, writ dism’d w.o.j.), to support its view that the insured had standing to sue her insurance company despite its settlement of her medical claims to the apparent satisfaction of the medical providers. Unlike the insurance companies in Olesijuk and Black, Allstate did not question whether Forth had incurred medical expenses and did not refuse to pay the medical providers. Instead, Allstate paid the medical bills according to its own evaluation. Under Texas law, to have standing a party must have suffered a threatened or actual injury. Forth does not claim that she has any unreimbursed, out-of-pocket medical expenses. She does not assert that these providers withheld medical treatment as a result of Allstate reducing their bills or threatened to sue her for any deficiency, or harassed her in any other manner. Moreover, Forth has no exposure in the future because limitations has have now run on the medical claims. From all appearances, her medical providers have accepted the amount Allstate paid them without complaint, thereby satisfying Allstate’s obligation under the policy. Because Forth does not claim that the manner in which Allstate settled her claim caused her any injury, the court concludes that she does not have standing in this case. OPINION:Per curiam.

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