Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:On June 9, 2002, Laci Jankowiak was a passenger in a car being driven by Daniel Dellasala, Jr. when they were involved in a car accident with Alejandra Salas, an uninsured motorist. The Jankowiaks sued Salas, Daniel Dellasala, Sr. as next friend of Daniel Dellasala, Jr., Allstate (the Dellasala insurer), and their own insurer. The Jankowiaks alleged both drivers were at fault and that Laci suffered injuries greatly exceeding the full amount of the Dellasala insurance policy’s liability and uninsured/underinsured motorist (UM) limits. The Jankowiaks settled with their own insurer for their policy’s $20,000 maximum UM coverage. The Jankowiaks also settled with Allstate for the Dellasala policy’s $25,000 limit for liability coverage. Despite these recoveries, the Jankowiaks allege these payments fall short of Laci’s actual damages. Thus, the Jankowiaks sought an additional $25,000 from Allstate under the policy’s limit of liability for UM coverage. Allstate moved for summary judgment, arguing the policy allowed only one recovery for each person injured in one accident. The trial court severed the Jankowiaks’ claim for UM benefits and granted Allstate’s motion for summary judgment. HOLDING:Reversed and remanded. The Jankowiaks claim the trial court erred when it interpreted the Dellasala insurance policy to mean $25,000 is Allstate’s maximum limit of liability for Laci’s injuries under both the UM and liability coverages. . Because the “maximum limit of liability” language is repeated for each coverage, we interpret it not as a maximum, policy-wide, or absolute global limit, but rather as a maximum limit of recovery for each specific coverage. That is, this language limits one person’s receipt of coverage benefits for bodily injury to $25,000 and, in a separate section of the policy, it operates again to limit one person’s recovery of UM benefits to $25,000 for bodily injuries sustained in one accident. Allstate attempts to bolster its position by relying upon an offset provision in the general liability coverage portion of the policy. There are no express reciprocal offset provisions in the policy. While payment under the UM coverage will reduce any amount the insured is entitled to recover under the liability coverage, payment under the liability coverage does not expressly reduce the amount the insured is entitled to recover under the UM coverage. “[I]f we were to adopt Allstate’s interpretation of the offset provision, the issue of whether an insured could recover a maximum of $25,000 or $50,000 would depend on the order of the payment of his or her claims. If a $25,000 UM claim were paid first, it would offset any potential responsibility to pay a liability claim. However, if a $25,000 liability claim were paid first (as is the case here), the insurer would still be responsible for UM claims up to an additional $25,000. While we find Allstate’s interpretation of the offset provision to be unreasonable, we note that Allstate tendered $25,000 to satisfy the bodily injury liability claim. Thus, even under Allstate’s interpretation of the contract, the offset provision does not absolve it of the Jankowiaks’ UM claim.” The court finds a more reasonable construction of the offset provision to simply prevent an insured from recovering in excess of his or her actual damages. Allstate cites the First Court of Appeals opinion Hanson v. Republic Insurance Co. to support its argument. 5 S.W.3d 324 (Tex. App. Houston [1st Dist.] 1999, pet. denied). The Hanson court found the amount tendered for payment of underinsured motorist claims precluded any further recovery under the policy’s liability coverage because its payment of liability coverage offset what could be recovered under UM coverage, and vice versa. “Nothing in the Hansons’ policy suggests that payment of liability claims would reduce the amount recoverable under UM claims. In short, we find the Hanson opinion was wrongly decided, and we decline to follow it.” The court finds that the “maximum limit of liability” language in the Dellasala policy does not reach outside the bounds of each separate coverage to limit other coverages within the policy. The court concludes that no other express provision limits UM coverage once liability limits have been paid to one person for injuries sustained in one accident. The trial court erred in its construction of the Dellasala policy, the court holds. Further, to the extent the Dellasala policy can be properly construed to provide less than the statutory minimum amount of coverage or to limit a covered person’s recovery of actual damages, the court finds such limiting provisions violate public policy. OPINION:J. Harvey Hudson, J.; Hudson, Fowler and Seymore, J.J.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.