COURT OF APPEALS HOLDS LIABILITY INSURER’S IMPROPER SCRAPPING OF THIRD-PARTY CLAIMANT’S VINTAGE MERCEDES IS ACTIONABLE, INSURANCE CODE/DTPA CLAIMS ALLOWED TO PROCEED
The Dallas Court of Appeals recently vindicated certain claims against an auto insurer by a third-party claimant, for declaring her lovingly restored 1983 Mercedes to be a total loss after an accident. In Letot v. USAA, 2016 WL 438725 (Tex. App.-- Dallas August 17, 2016), Letot was in a collision with USAA's insured. USAA declared the car a total loss, sent Letot a check for the car's $2,500 actual cash value, and reported it to TxDOT as a salvage motor vehicle. TxDOT flagged the vehicle as a salvage, which invalidated Letot's registration and prevented her from operating or selling it until she obtained a salvage title. Letot rejected USAA's check and opted to sell the car as scrap since she could do nothing else with it.
In the ensuing lawsuit, Letot asserted a number of claims against USAA, and USAA initially won summary judgment. On appeal, the court held USAA's tender of a check, later rejected and returned, could not gain USAA a statutory safe harbor because it was a mere tender, not "payment" of a claim. The court also upheld Letot's Insurance Code and DTPA claims even though she was a third-party claimant. The Texas Insurance Code allows any "person" to make a claim, but to the extent the Insurance Code claim is based on a tie-in violation of the DTPA, the claimant must still show consumer status under the DTPA. USAA attacked Letot's standing under the Insurance Code, but not her standing under the DTPA, and thus her Insurance Code/DTPA claim was remanded and allowed to proceed.