February 10, 2015

Last Tuesday, the Houston Court of Appeals affirmed summary judgment in favor of an insurer after finding that the agent's alleged statements that the insured was "fully covered" were not actionable when the insurer paid the applicable policy limits for a theft loss, even though the insured sought recovery for substantially larger losses.  In Zatorski v. USAA Texas Lloyd's Company, 2015 WL 456474 (Tex.App.- Houston [1st Dist.] February 3, 2015), the insured purchased a renter's policy seeking "full coverage" but did not review it upon receipt.  Armed intruders reportedly broke into the insured's rental home and stole firearms and a safe containing watches, jewelry and cash valued at over $260,000.  The insured submitted a claim to USAA which promptly responded paying policy limits of $1,000 for jewelry, $2,000 for firearms, $200 for cash and $1,300 for the safe, or $4,500 total.  The insured sued and the trial court granted summary judgment in favor of USAA on all claims.

On appeal, the court examined the nature of the alleged representations by USAA's agent and the disclosures made by the insured as to the value of the items for which he sought coverage.  And while the insured testified that the insurance agent reportedly told him he was "covered fully", the evidence did not show that the insured told the agent that "the value of any of the items for which he sought to buy coverage."  Noting that "[g]eneral claims by the insurer of the adequacy or sufficiency of coverage ... are not generally not actionable..." and that USAA paid the full amount or applicable policy limits for the items lost, the court found no breach of contract.  And because there was no breach of contract, the common law and statutory bad faith claims failed as well.  Summary judgment in favor of USAA was affirmed.

Editor's Note:  We congratulate USAA and defense counsel Christopher Martin (lead trial counsel) and Levon Hovnatanian, (lead appellate counsel) with Martin, Disiere, Jefferson & Wisdom in securing this significant victory.