UIM CARRIER’S AGREEMENT TO A THIRD PARTY SETTLEMENT BUT FAILURE TO OFFER UIM SETTLEMENT MAY OR MAY NOT STATE A CLAIM UNDER RULE 12B6
In Fowler v. General Insurance Company of America, 2014 WL 5879490 (N.D. Tex. November 13, 2014,) the federal district court dismissed part of Plaintiff’s claims for failure to state a claim but refused to dismiss other claims. In this UIM case, Plaintiff was injured in a motor vehicle accident. She settled for the policy limits under the third party tortfeasor’s policy and General Insurance Company of America, her UIM carrier, consented to the settlement. The Plaintiff then tendered the claim to the UIM carrier who never made its own settlement offer. Plaintiff sued the UIM carrier on various theories under the Texas Insurance Code.
The Court dismissed claims based on “material misrepresentations” because the failure of the UIM carrier to make a settlement offer is not a misrepresentation per se and the carrier’s prior approval of the settlement does not prevent it from later contesting the extent of the UIM policyholder’s damages or the allocation of liability. However, the Court denied the motion to dismiss the claims that the UIM carrier failed to settle when liability was reasonably clear upon the presentment of documentation about the accident after the prior settlement. Additionally, the Court held that the consent to the prior settlement could be misleading when the carrier subsequently refused to settle, and therefore the Court denied the motion to dismiss related claims. The Court’s partial denial of the motion to dismiss was framed solely as recognizing a claim was alleged, but the resolution was still left up to a jury.